When Foreign stock is held in most investment accounts and foreign tax is withheld on the dividends, the foreign tax credits usually refund most of this tax paid. But what happens when foreign stock is held in a TFSA or RRSP? The foreign tax credit is not available. Is there any other provision in the Canadian ITA to get that back?
Foreign dividends are taxed at a much higher rate than Canadian eligible dividends so I typically prefer to hold foreign stock in a registered account. I’m wondering if anyone with foreign investment experience has any tax planning advice.