If you inherit a Canadian RRSP or TFSA, the tax path is a CRA file and the Islamic path is a screening file. They are not the same. A beneficiary designation on the account generally pays outside the will, so an Islamic will does not automatically retitle that RRSP. Confirm designations and any spouse or successor-holder language with the custodian. Then screen every holding you keep, and turn off interest on cash. Manzil RRSP and TFSA products are available in every province and territory if you are moving the money into a new account you control. This is not legal advice.
Coordinate with registered-account beneficiaries vs an Islamic will and Manzil's Islamic will. Start on the investing hub.
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Two Tracks
| Track | What it decides | What it does not decide |
|---|---|---|
| CRA / custodian | Spouse rollover, successor holder, tax on a non-spouse beneficiary, withholding | Whether the holdings are permissible |
| Islamic will / faraid | Estate assets that actually fall into the estate | TFSA and RRSP designations that pass outside the will |
| Screen | Keep, sell, or purify what you now own | CRA's tax bill. Pay the tax. Do not confuse it with riba |
A common spouse path is a tax-deferred transfer into the surviving spouse's RRSP or a successor-holder TFSA, when CRA and the account documents allow it. Confirm that on CRA and with the issuer. A child or other beneficiary often faces a different tax result on an RRSP. This page will not invent those rates. Get them from CRA or the estate lawyer.
What To Do With the Book
- Ask the custodian for a holdings list dated the date you take control
- Screen every ticker. Inherited bank stocks and conventional bond funds still fail a screen
- If you will use Manzil, ask whether they can take a cash transfer or an in-kind transfer. In-kind can be a CRA disposition. See in-kind transfers
- Turn off interest on cash the week the account hits your name
- Do not leave a 'temporary' high-interest savings ETF in a TFSA because the estate is messy
Frequently Asked Questions
Does an Islamic will override the TFSA beneficiary?
Usually no. Designations on registered accounts typically pay outside the will. That is why the beneficiary form has to match the Islamic plan. Read the beneficiaries guide.
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Is CRA tax on an inherited RRSP riba?
No. It is tax. Pay it if it is due. Withholding on a registered withdrawal is also tax, not profit you may keep.
Can I move an inherited RRSP into Manzil?
Manzil RRSP is available in every province and territory. Whether this inherited account can transfer depends on the issuing institution and on CRA. Ask both. Do not invent a fee or a timeline.
The inherited TFSA holds a conventional GIC. What now?
A GIC is an interest contract. After you have the legal right to transact, replace it with a screened holding or cash that does not earn interest. Do not wait for maturity as a Shariah plan.
Bottom Line
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Read the designation, then CRA, then the screen. Manzil is available nationwide in Canada for a new RRSP or TFSA you control. An Islamic will still matters for everything that actually falls into the estate.
