Coles Notes for W-8BEN
moneyrelations :: Aug.03.2007
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I finally got it done. After much internal dialogue and mental visualization, I finally transferred my mutual funds to RRSP/non-RRSP brokerage accounts.
For anyone who is thinking of consolidating their assets to one financial institution, it takes 2-4 weeks for the transfer to go through.
I also rolled over my cash account for margin and options trading in my non-RRSP as I figure I’ll need it someday when I broaden my investment strategies. A word to the wise: it can’t roll over if you have a pre-existing purchase order so you will have to cancel that. It prevented me from making purchases during the selloff as the cash account was stuck in mid-transfer and I had no margin available in my margin account to make the purchase either. Make sense? Well, I’ll get on with it. I also opened a US margin/options account too.
I just got my welcome kit in the mail and as I was researching online for US securities, I came across the W-8BEN form. Apparently, I have to fill this form to claim Canada/US tax treaty benefits. From my understanding of the Coles Notes version of this treaty (Financial Web Ring and Shakespeare’s primer), you (non US-resident) are entitled to a reduced withholding tax rate of 15% for dividends, 10% for interest and 0% for capital gains for US securities held outside an RRSP. In an RRSP, there is no withholding tax.
For someone whose primary purpose in doing all this is to invest in US securities, this is pretty important but it wasn’t in my kit. I phoned TDW twice to see if I needed to fill this form. One person said yes, another said no (I think the no came from the RRSP side). Just in case, I downloaded and filled out the form twice for documentation on both accounts. Better to be safe than sorry because I wouldn’t want to be dinged on extra withholding tax.
Investing ::
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