Canadian Money Forum banner

1 - 4 of 4 Posts

·
Registered
Joined
·
155 Posts
Discussion Starter #1
I've been reading a lot lately about portfolio allocation and how we can allocate different bits of our portfolio to different accounts (RRSP, TFSA, non-registered) to take advantage of favourable tax treatment.

My question is this: If one holds only ETFs that are traded on the TSX, does it matter how these ETFs are allocated? For example, I hold XSP (S&P 500 currency-hedged ETF), CWO (emerging markets), and XIN (international). Would it make any difference for tax purposes where I hold those ETFs or should I treat them the same as I would XIC or CRQ?

Thanks for the input.
 

·
Registered
Joined
·
500 Posts
Further to what CC wrote, if there are any foreign withholding taxes applicable to XSP, CWO, or XIN, they may be creditable if held in a taxable account, but they’d be lost forever if held in an RRSP ... the Canada-US tax treaty (for example) does not apply in such a case ... this would somewhat mitigate the disadvantage of holding such funds in a non-reg account, and would somewhat diminish the advantage of holding them in a registered account ... the effect would likely be too small to affect your registered-vs-nonreg decision, but is something to be aware of.

Note that this refers to taxes withheld from the Canadian-registered fund itself, not taxes withheld from you.
 
1 - 4 of 4 Posts
Top