Does a Surviving Spouse Keep Their Own TFSA Contribution Room After Inheriting in Canada?

This answer covers Canadian federal tax law, which applies in every province.

Yes. When you become successor holder, your own TFSA contribution room is not affected, as long as the deceased had no excess amount in the account. You also do not gain the deceased holder's unused contribution room. A successor holder is a surviving spouse or common-law partner named in the TFSA contract or the will who becomes the new holder on the holder's death.

A direct transfer between your TFSAs does not affect your available room, and if you have several TFSAs, room applies to all of them collectively. The account keeps its tax-free status because the deceased is not considered to receive an amount from it. You must have a valid social insurance number or individual tax number.

If the deceased had an excess TFSA amount, you are treated as making a contribution equal to the excess on the first day of the month after death, and any resulting excess in your accounts is taxed at 1% per month while it remains. Quebec does not recognize successor holder designations, though a Quebec surviving spouse can still make an exempt contribution. A lawyer or accountant can confirm your situation.