My accountant informed me that there are no taxes in a TFSA, but my discount broker, BMO InvestorLine, has been deducting foreign withholding tax from my quarterly BIP.UN distributions. What is going on here?
) in my tax-free savings account. My accountant informed me that there are no taxes in a TFSA. However, my discount broker, BMO InvestorLine, has been deducting foreign withholding tax from my quarterly BIP.UN distributions. What is going on here?BIP.UN is a Bermuda-based limited partnership that derives its income from holding companies in Canada, the United States and Bermuda.
If you can’t stand the idea of paying even a penny of withholding tax, you could move your BIP.UN units to your RRSP. Or, you could swap them for shares of sister company Brookfield Infrastructure Corp. , whose dividends are not subject to U.S. withholding tax. However, because BIPC trades at a higher price than BIP.UN, and therefore has a lower yield, your investment income will take a hit if you purchase an equivalent dollar amount of BIPC.
I don’t know what time period you are looking at, but I wouldn’t characterize ZDV’s performance as “poor.” I’d say “average” is more accurate. Regarding ZDV possibly paying out more than it collects in dividends: I don’t think there’s anything to worry about here. Over the past year, ZDV has paid a cash distribution of seven cents a month, or 84 cents in total. Based on ZDV’s current market price of $20.09, the dividend yield is about 4.2 per cent. That is in line with the yields of the banks, telecoms, pipelines, insurers and utilities that account for a majority of ZDV’s holdings.
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