Q: I am getting older and I am trying to simplify my accounts in case my wife or daughter have to take over for whatever reason. I am moving to VBAL and VGRO as all in one type ETFs to make that happen. My question is about taxing: how are these viewed by the CRA?
5i Research Answer:
ETFs 'pass on' tax consequences to unitholders. Thus, the tax status will depend on what the ETF holds. VBAL will be a mix of US dividends, interest, and Canadian dividends and interest. Withholding taxes will apply on the US dividends. VGRO will be similar, but with a larger representation of equities will have a larger component of taxes classified as dividends.