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Evolve Canadian Banks and Lifecos Enhanced Yield Index Fund (BANK)
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Global X Canadian Oil and Gas Equity Covered Call ETF (ENCC)
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Hamilton Canadian Financials YIELD MAXIMIZER TM ETF (HMAX)
Q: Would Canadian funds such as ENCC, BANK, HMAX which hold Canadian stocks be taxed as dividend income or as capital gains income by the CRA ?
I believe that similar funds holding US stocks would be taxed as capital gains.
Thank you.
I believe that similar funds holding US stocks would be taxed as capital gains.
Thank you.
5i Research Answer:
ETFs pass on tax consequences to unit holders. It depends on the fund and the year. Most high income funds are partially capital gains and partially return of capital. Some dividend allocation can also be included. Covered call income is considered capital gains. In the last full year of data on its website, BANK shows that 82% of income was return of capital and 18% was eligible dividends, for example.