How is SLV/GLD taxed for Canadian nonregistered investment accounts?
Question:
The reason I'm asking is because these funds are not registered
investment companies, but are structured as "grantor trusts" instead.
I know that other US and foreign equity ETFs are legally
recognized as "registered investment companies" and are thus exempt from the "foreign investment entity" legislation which could otherwise cause for onerous taxes; so
ETFs and closed-end funds which are registered investment companies benefit from the same tax treatment as Canadian stocks with respect to dispositions (ie. simple capital gains w/ 50% inclusion rate).
But do these "Grantor trust" strutured metal ETFs (ie. GLD/SLV) also benefit from the same favorable tax treatment (50% inclusion rate of realized capital gains and nothing else)?
Answer:
50% rate is too high its more like 32% at least in the US but I cannot speak for Canadien taxes but they are considered commodites and thus subject to the higher tax brackets. sorry.
Inquire at Barclays Global Investors in Toronto. This is the firm that runs GLD & SLV, don't know about IAU.
You can phone their wholesale marketing support team at 1-866-486-4874. Team works principally with brokers selling BGI ETFs, but a woeful aspect of their job is answering serious questions from persistant retail investors or would-be investors like yourself. They might guide you on to rulings by the federal tax authorities.
In Canada, there may be a difference between taxation of dispositions from GLD vs SLV. I believe BGI has made the GLD ETF available in Canada, but not yet the silver fund. Ask to make sure.
More Questions & Answers...