This is the first of a new, regularly appearing Q&A feature on Globe Investor that aims to answer your questions on personal finance and investing, with the help of RBC Dominion Securities adviser Nancy Woods.
Dear Nancy Woods,
My friend told me the other night that he was being withheld tax on all dividends paid on his U.S. stock holdings. I own U.S. stocks and I don't see this happening to mine. Why would that be?
Ken
Dear Ken,
My guess is that your U.S. stocks are being held within your retirement account. If he is being taxed as a non-resident, he needs to sign the W8BEN form that declares that he is a resident of Canada. We have a tax treaty with the U.S. that eliminates the withholding tax for income paid on U.S. investments when held within an account meant for retirement eg. RSP, RIF etc. With that definition, it means that neither an investment account nor a Tax Free Savings Account (TFSA) qualify. They will be subject to a 15 per cent withholding tax instead of the typical 30 per cent. Also, be aware that if you are still being charged a non-residence tax that maybe your investment is a foreign-based company that has an ADR trading on an American exchange.
Nancy Woods, CIM, FCSI, is an associate portfolio manager and investment advisor with RBC Dominion Securities Inc. To ask her a question, send an e-mail to asknancy@rbc.com
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Regretting not selling in May and going away? Markets have been cooling just as the weather has been heating up - so what should you do now?
RBC Dominion Securities Inc. adviser Nancy Woods will guide you through some winning investment strategies in this live 90-minute Q&A Wednesday at 12 noon ET. Nancy, who this month begins as a regular contributor to Globe Investor in a new Q&A series, will answer questions on how to steer your portfolio through the recent rough waters and create appropriate goals for your money matters.