# ETF: US withholding tax hit in RRSP



## curmudgeon (Feb 8, 2012)

I want to hold US stocks or bonds in my RRSP, preferably through an ETF.

I could simply buy a US ETF on a US exchange in my self directed RRSP. There will be no US withholding taxes on the dividends or interest. The only downside is I have to pay retail spreads to exchange CAD for USD when I buy the ETF, and again the other way with each distribution I get and when I sell.

The other option I see is to buy one of the Canadian listed ETFs that simply hold a US ETF (such as XSP XIG or XHY). But looking at the distribution information on the ETF's website, I see Foreign Tax Paid of roughly 15% of Foreign income. My understanding is that this could be recovered (up to 15%?) if I hold it in a non registered account, but that it's not recoverable holding it in an RRSP. This seems like a huge strike agains holding such ETFs in an RRSP, but noone seems to point this out. Am I missing something?

If the US ETFs were simply cross listed to the TSX, I could avoid both problems above, no?


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## leoc2 (Dec 28, 2010)

BMO Investorline and other discount brokers allow you to hold US funds. Use DLR and DLR.U to transfer funds. Sign up with one of them. That solves the problem.


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