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Is it prudent to put US ETF’s or US stocks in a TFSA? He doesn’t recommend putting US stocks into TFSA’s because of certain advantages being lost because of the dividend.
Portfolio Manager, Industrial Alliance Securities
"He doesn’t recommend putting US stocks into TFSA’s because of certain advantages being lost because of the dividend." What advantages? Elaborate please.
Inside your RSP, dividends from US corporations are not subject to withholding tax because of the reciprocity agreement Canada has with the US. There is as yet (as far as I'm aware) no agreement that dividends from US equities will be treated similarly inside your TFSA. Some information is here:
However, it comes down to choice. It's only 15% withholding tax on your dividend, so as long as the company has share price growth, you may not care. But if the company pays out most of its earnings as dividends and has little prospect for share price growth, you may want to avoid holding in your TFSA.
All that being said, it seems Canada Revenue Agency could have soemthing to say on this but doesn't:
Perhaps that's because it's not up to them but to the country taxing the dividends paid to you inside your TFSA.
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