Will they tax RRSP dividends?

Zoomer | January 1st, 2006


Q

– I have a simple question to ask. I opened a self-directed RRSP with my bank. I believe from my reading that the dividend I receive from my stocks in the RRSP is 100% tax-sheltered. It will be there as cash which I can use to buy more other company’s stock.



Am I right or completely wrong? If I am wrong, then the dividend will be taxed accordingly? (50% of it at my marginal tax rate?) – S.Y.


A

 – Any investment income received inside an RRSP is tax sheltered, no matter what the source. No tax is payable until money is actually withdrawn from the plan. – G.P.