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Email this8:08 am
March 11, 2018
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I was just wondering if anyone has a USD side to their TFSA and what they have in there. I am just setting it up and wondering if there was any downside i am missing to moving inter listed stocks to the US side? Would moving a Canadian companies stock to the NYSE trigger american withholding tax? Can one still hold a stock on the TSX that pays US dividends and receive the US dollars instead of CND? Can the stock stay on the stock stay on the Canadian side and receive the dividends on the US side? Sorry for the rambling, any insight would be appreciated.
9:07 am
October 27, 2013
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For inter-listed stocks, i.e. TSX / American exchanges, it only makes sense to hold the stock on the USD side of an account IF the stock pays dividends in USD. IOW, don't hold stocks on the Cdn side if they pay USD dividends, and don't hold stocks on the USD side if they pay CAD dividends. The brokerage will convert* the dividends at their forex rate to the currency account in which the stock sits.
Canadian stocks do not have US withholding tax applied if they are held on the USD side of the account. After all, they still are Canadian stocks, and their dividends are still eligible for the DTC.
* There are a few unique situations where certain companies, which pay dividends in USD, that convert the dividends to CAD before they reach the brokerage. If you hold that stock on the USD side, you will end up with 2 conversions. I have heard and think BAM.A could be one of those. Best way to find out is to either ask the brokerage directly, or wait for one dividend to come into your account and then figure out whether the brokerage charged you forex commission or not.
11:38 am
March 11, 2018
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Interesting. Just found out ScotiaItrade receives all dividends in Canadian dollars. So even if you have a US side to your account, the originating dividends in USD are converted to CND then converted back to USD. So much for that idea.
3:12 pm
July 10, 2011
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Questrade you can choose.. I've still screwed it up and/or ticker change etc..
6:00 pm
April 6, 2013
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Pipersierra said
Interesting. Just found out ScotiaItrade receives all dividends in Canadian dollars. So even if you have a US side to your account, the originating dividends in USD are converted to CND then converted back to USD. So much for that idea.
That doesn't sound right. According to this Scotia iTRADE help entry, the US$ side should receive the US$ dividends in their original US$:
How does the U.S. side of my registered account work?
Your registered account can hold U.S. dollars and securities, allowing you to purchase, hold and trade U.S. dollar securities in your account. If you currently hold U.S. dollar denominated securities in the Canadian side of your registered account, you can move these over to the U.S. side, allowing you to receive any distributions in U.S. dollars.
For more info on moving your securities, go to the Account Details for your registered account > Additional Services > Transfer Securities Between Accounts. Or call us at 1-888-872-3388.
Could the US$-side holding be not properly set up? Canadian companies that declare US$ dividends will often convert and pay them in C$ when the shareholder is a Canadian resident, unless otherwise instructed. For example, from the bottom of Brookfield Asset Management (BAM.A) Distribution History:
Please note that the quarterly dividend payable on Brookfield's Class A Limited Voting Shares is declared in U.S. dollars. Registered shareholders who are U.S. residents receive their dividends in U.S. dollars, unless they request the Cdn. dollar equivalent. Registered shareholders who are Canadian residents receive their dividends in the Cdn. dollar equivalent, unless they request to receive dividends in U.S. dollars. …
6:55 pm
June 3, 2015
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Also remember a USD TFSA does not work like a USD RRSP. You are not exempt from a US stock tax witholdings (15%) in a USD TFSA, but you are exempt in a USD RRSP.....but the Capital gains of a USD stock in a USD TFSA are exempt.
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9:32 am
April 6, 2013
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Joe said
Also remember a USD TFSA does not work like a USD RRSP. You are not exempt from a US stock tax witholdings (15%) in a USD TFSA, but you are exempt in a USD RRSP.....but the Capital gains of a USD stock in a USD TFSA are exempt.
That's because TFSA's fail to meet the third condition required for the exemption under paragraph 2 of Article XXI (Exempt Organizations) of the Canada-US tax convention:
2. Subject to the provisions of paragraph 4, income referred to in Articles X (Dividends) and XI (Interest) derived by a trust, company, organization or other arrangement that is [(a)] a resident of a Contracting State, [(b)] generally exempt from income taxation in a taxable year in that State and [(c)] operated exclusively to administer or provide pension, retirement or employee benefits shall be exempt from income taxation in that taxable year in the other Contracting State.
Canadians are generally exempt from US taxes on capital gains from US stocks under Article XIII (Gains):
4. Gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3 shall be taxable only in the Contracting State of which the alienator is a resident.
4:51 pm
October 27, 2013
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Pipersierra said
Interesting. Just found out ScotiaItrade receives all dividends in Canadian dollars. So even if you have a US side to your account, the originating dividends in USD are converted to CND then converted back to USD. So much for that idea.
As Norman and Joe have said, that should not be the case for most dividends received in USD (BAM.A excepted and perhaps a few others). You do lose the 15% withholding on US domiciled securities though (not Canadian domiciled securities).
4:09 pm
September 15, 2019
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I have US dividend paying stocks in a Scotia iTRADE TFSA. iTRADE converts the US funds to CAD but does not convert them to USD again.
Some institutions do not convert CAD to USD?
I have a few phone calls to make tomorrow. I remember asking Scotia iTRADE about this subject. Their reply was that's how things work.
10:07 pm
April 6, 2013
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Sounds like you have not enrolled in the US$ side of your Scotia iTRADE TFSA. Consequently, you are holding those US stocks in the C$ side of your TFSA.
See Scotia iTRADE: Diversify your portfolio with U.S. Dollar Registered Accounts:
1. What is a U.S. dollar registered account?
Your Scotia iTRADE registered account has both a U.S. and Canadian dollar “side”, meaning you can hold cash and securities in both currencies in the same account in their respective currency “sides”. You can enroll in the U.S. dollar side through Scotia OnLine >> Manage my account >> Additional Services >> Scotia iTRADE >> Service Request >> Enroll to enable the U.S. Dollar side of registered account.
2. What registered accounts are offered by Scotia iTRADE with a U.S. dollar side?
All registered account types, except Registered Education Savings Plans, (RESPs), have a U.S. dollar side. For RESPs, Scotia iTRADE offers a U.S.-Friendly option.
…
4:42 pm
September 15, 2019
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Thank you for the information, everyone!
I originally opened my Scotia iTRADE TFSA's in the early part of 2014. At that time, I was told, they did not have USD "sides"; that functionality didn't arrive until 2018.
Today I had a representative create USD "sides". My US stocks will transfer later this week.
Again, thanks!
8:27 am
April 6, 2013
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Scotia iTRADE used to have their U.S.-Friendly option, for $30/quarter:
For trades in U.S. securities in Scotia iTRADE's U.S.-Friendly Canadian dollar registered accounts on a single trading day, the foreign currency component will be transacted at the single, benchmark, mid-market rate used by Scotia Capital Inc. to price its holdings of US/Canadian dollar currencies at the end of that trading day (SCI Rate). Scotia iTRADE will not apply its retail "mark-up" or spread over and above the SCI Rate to the foreign currency component of the trade. Only trades in U.S. securities in the U.S.-Friendly registered accounts will be given this preferential foreign exchange rate. A quarterly fee of $30 (plus applicable taxes) per registered account per calendar quarter applies. …
8:35 am
July 31, 2012
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I hold CocaCola and Intel on US TFSA at TD and dividends remain in US$
7:05 am
February 20, 2018
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Can US$ be swapped for CAD to a rsp/rif/tfsa without tax implications. For example put into registered plan US$ at the same time pull out an equal amount of Cdn$ ?
6:55 pm
July 3, 2023
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Bud said
Can US$ be swapped for CAD to a rsp/rif/tfsa without tax implications. For example put into registered plan US$ at the same time pull out an equal amount of Cdn$ ?
No, at the time you transfer your USD holdings to registered accounts (from non registered accounts), it is considered a "sell" transaction (even if you transfer in kind) and you pay all the income taxes (for capital gains etc.) and the price of the transaction will be determined as a new booking prices for the holdings in your registered accounts.
12:06 pm
June 12, 2024
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Does US side TFSA account has a different account number than CAD side of TFSA account? How do I know if I have US side TFSA? Thank you
12:10 pm
June 12, 2024
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Can I journal a stock from TFSA CAD to TFSA USD side? That doesn't consider as a contribution but just a transfer, correct?
1:07 pm
October 27, 2013
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You may need to ask iTrade if you have a USD side to the account if it does not show online. If not, ask for it. You may need to send in a form.
A journal is just an internal transfer, not a withdrawal and then a contribution.
8:43 pm
April 6, 2013
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If one doesn't see the US$ side, then the US$ side has not been activated.
Earlier post has instructions for enrolling/activating the US$ side of Scotia iTRADE registered accounts:
… You can enroll in the U.S. dollar side through Scotia OnLine >> Manage my account >> Additional Services >> Scotia iTRADE >> Service Request >> Enroll to enable the U.S. Dollar side of registered account.
7:25 am
February 11, 2024
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Bud said
Can US$ be swapped for CAD to a rsp/rif/tfsa without tax implications. For example put into registered plan US$ at the same time pull out an equal amount of Cdn$ ?
The simple answer is no. The US$ put in will be considered a contribution; so you better have contribution room. The CDN$ pulled out will be considered a withdrawal. A withdrawal from a TFSA will increase your contribution room next year. A withdrawal from RRSP/RRIF will be taxed. If you are transferring in securities you will taxed on possible capital gains.
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