Filing W8-BEN forms with more than one brokerage

Discuss your favourite picks, broker, and trading or investment style.
Post Reply
Hogwild
Contributor
Contributor
Posts: 393
Joined: 18 Aug 2015 21:46

Filing W8-BEN forms with more than one brokerage

Post by Hogwild »

Hi everyone:

I have brokerage accounts with TD, BMO and CIBC (don't ask!.
Way back when, I did not file W8-BEN forms with all of them. I am trying to do so now, and have a few questions. No one at any of the three brokerages with whom I spoke yesterday had any clue at all. The IRS is closed today due to Thanksgiving holiday.

1. Do I need to just file one for all brokerages, or one for EACH brokerage?

2. Assuming all I want is to avoid withholding taxes for securities in my RRSP account, do I just leave #10 (special rates and conditions) in Part 2 blank?

3. I registered two out of the three accounts with their respective brokerages under my (firstname) (Lastname), but with one of them, I used (firstnameabbreivated) (lastname). Is this going to cause me problems down the road? Will the IRS even accept both of these, or ??

Thanks in advance for any help.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

File one with each brokerage. This is the only basis with which the brokerage can utilize/invoke the provisions of the Can-US tax treaty to your benefit, meaning 15% withholding on most US income, rather than 30%.

It would have been consistent to use the same name on all forms but it should be no big deal. The point really is to ascertain that you are not a US person (in its various definitions) and are a Canadian resident. I have never filled out #10. Unless you have some special circumstances per the Instructions, leave it blank.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
Hogwild
Contributor
Contributor
Posts: 393
Joined: 18 Aug 2015 21:46

Re: Filing W8-BEN forms with more than one brokerage

Post by Hogwild »

AltaRed:

Thank you so much for that help. I will fax the other brokers right now.
User avatar
DavidR
Veteran Contributor
Veteran Contributor
Posts: 1937
Joined: 30 Oct 2005 08:33
Location: Toronto

Re: Filing W8-BEN forms with more than one brokerage

Post by DavidR »

Hogwild wrote:Hi everyone:
2. Assuming all I want is to avoid withholding taxes for securities in my RRSP account, do I just leave #10 (special rates and conditions) in Part 2 blank?
I don't think a W8-BEN is needed if the only accounts you have are RRSPs.
RRSPs are already exempt from US withholding taxes.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

Agree with David. I missed seeing RRSP in the OP's first post. :oops:
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
Hogwild
Contributor
Contributor
Posts: 393
Joined: 18 Aug 2015 21:46

Re: Filing W8-BEN forms with more than one brokerage

Post by Hogwild »

Only one of them is an RRSP. The other two are not registered accounts.

Can anyone tell me the e-mail address or fax number to which I can send a W8-BEN at BMO?

No one seems to know anything at these brokerages. :roll:
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

If you mean BMO Investorline, call them. I've never had an issue with their customer reps. The mailing and fax address is given in their Contact Us tab online. Emailing will not likely be an accepted form since it is not encrypted.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Filing W8-BEN forms with more than one brokerage

Post by deaddog »

I just opened an account at BMO and they did not require a w8-ben. I asked for one specifically and was told it was not required. On the other hand RBC has sent me an message stating that my w8-ben is outdated. Have the requlations been changed.

One time with IB my w8 expired and the witholding was 30% of the sale, not 30% of the capital gain.. I have sold Canadianstocks on the US Exchange doing a gambit and not had a problem with BMO Investorline.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

If one does not have a USD account, nor US domiciled securities, a W8-BEN is not required. The concept is to reduce US tax withholding. I don't have one with BMO IL either.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Re: Filing W8-BEN forms with more than one brokerage

Post by ockham »

AltaRed wrote:If you mean BMO Investorline, call them. I've never had an issue with their customer reps. The mailing and fax address is given in their Contact Us tab online. Emailing will not likely be an accepted form since it is not encrypted.
Just went through this with RBCDI. Customer reps very helpful. They would not accept email, but encouraged me to use fax over regular mail.
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Filing W8-BEN forms with more than one brokerage

Post by deaddog »

AltaRed wrote:If one does not have a USD account, nor US domiciled securities, a W8-BEN is not required. The concept is to reduce US tax withholding. I don't have one with BMO IL either.
That is my concern. I do have a US dollar account plus own US stocks that both pay dividends and will have capital gains when I sell them.

I did a gambit with RBA and did not have any problem selling on the US exchange and having US dollars deposited to my US dollar account. I have emailed a query so that I will have something in writing but I do not expect to get a reply until early next week.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
DenisD
Veteran Contributor
Veteran Contributor
Posts: 4081
Joined: 19 Feb 2005 01:24
Location: Calgary

Re: Filing W8-BEN forms with more than one brokerage

Post by DenisD »

AFAIK, there is no US withholding tax on sales or capital gains. Just income. Recently updated my W8-BEN at IB. I have to do it every year or two. It was all done online.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

deaddog wrote:That is my concern. I do have a US dollar account plus own US stocks that both pay dividends and will have capital gains when I sell them.
As Denis said, there is no withholding on stock sales. Only on income received. Have you checked your USD dividend payments to see if there was 30% or 15% withholding? Most brokerages just show the 'net' dividend deposited without indicating how much was withheld.

Example from Scotia iTrade. I have to do the math to calculate that the dividend would be $300 and only $255 was paid = 15% withholding

Code: Select all

Sep. 08 CASH DIVIDEND JOHNSON & JOHNSON 	0.7500 	255.00
			CASH DIV ON 400 SHS
			REC 08/25/15 PAY 09/08/15
			NON-RES TAX WITHHELD
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
ockham
Veteran Contributor
Veteran Contributor
Posts: 2214
Joined: 04 Apr 2006 21:50
Location: The Prairies

Re: Filing W8-BEN forms with more than one brokerage

Post by ockham »

I may be missing something here. Why would the mere holding of cash in a US$$ account at a Canadian bank or brokerage attract the need for the W8-BEN form?? The asset is Canadian domiciled, notwithstanding its currency, istm. Or for that matter, doing a NG with a Canadian domiciled corp?? I think I'm being scrupulous in not holding any US domiciled assets, but I do have US$$ in my Canadian brokerage accounts, and I do NG in them.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

To my knowledge, we were not talking about USD cash in Cdn bank or brokerage accounts. I thought we were talking about US domicilied stocks, etc.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Filing W8-BEN forms with more than one brokerage

Post by deaddog »

DenisD wrote:AFAIK, there is no US withholding tax on sales or capital gains. Just income. Recently updated my W8-BEN at IB. I have to do it every year or two. It was all done online.
Maybe it is because I was with IB but a couple years ago before going on a cruise I closed all my positions in my IB account as I wasn't going to have internet connections for a couple weeks. When I got back I found that because I had let my w8 ben expire that 30% of the proceeds for each sale had been withheld. Because I had been using margin nearly 50% of my account was tied up.

I explained the situation to IB and they some how reconciled it but it was quite shock. I was surprised that the withholding amount was on the proceeds not on the capital gain.

Again it might have been because Interactive Brokers is a US based company operating in Canada but I have made sure that my W8s are up to date with all my Brokers and was surprised that BMO didn't require one.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Filing W8-BEN forms with more than one brokerage

Post by deaddog »

AltaRed wrote: As Denis said, there is no withholding on stock sales. Only on income received. Have you checked your USD dividend payments to see if there was 30% or 15% withholding? Most brokerages just show the 'net' dividend deposited without indicating how much was withheld.
15% so far on the one dividend paid in my new BMO account.

Unlike RBC, BMO does not breakout the Canadian and US holdings into separate accounts. I opened a separate account to keep them separate.
I have not made any sales in the US account as of this time.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
User avatar
deaddog
Veteran Contributor
Veteran Contributor
Posts: 3422
Joined: 19 Jan 2008 19:59
Location: Central BC/Arizona

Re: Filing W8-BEN forms with more than one brokerage

Post by deaddog »

deaddog wrote:
I have emailed a query so that I will have something in writing but I do not expect to get a reply until early next week.
BMO responded to my e-mail as follows;
The purpose of the W8BEN (every three years) is required to receive a reduced 15% withholding tax rate on US source income. In liu of this form, by sending us a copy of your Provincial Driver’s License at the time of account opening, you now meet this requirement. Your account has already been document and you do not need to send us the W-8BEN form.
"And the days that I keep my gratitude higher than my expectations, well, I have really good days" RW Hubbard
User avatar
IdOp
Veteran Contributor
Veteran Contributor
Posts: 3873
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Filing W8-BEN forms with more than one brokerage

Post by IdOp »

A few years ago it was time to renew my W8-BEN at TD Waterhouse. I called them to get the address to send it to, and the agent also told me it wasn't necessary due to the driver's license as in BMO's reply to deaddog. I ended up sending the form in anyway, but I think at this point I will just stop and hope it isn't needed, as they say.
User avatar
AltaRed
Veteran Contributor
Veteran Contributor
Posts: 33398
Joined: 05 Mar 2005 20:04
Location: Ogopogo Land

Re: Filing W8-BEN forms with more than one brokerage

Post by AltaRed »

This may be the new way of doing things. I now seem to recall the last time I was requested to send in a W8-BEN was about 5 years ago to Scotia iTrade.

Either way, I would wait for the institution to make the request. After all, it is they who determine what they need to continue allowing the investor to avail him/herself of treaty provisions. That said, I have checked my statements once a year or so to ensure my withholdings are only 15%.
Imagefiniki, the Canadian financial wiki The go-to place to bolster your financial freedom
User avatar
IdOp
Veteran Contributor
Veteran Contributor
Posts: 3873
Joined: 16 Feb 2006 11:27
Location: On the Pacific sea bed, 100 mi off the CA coast.
Contact:

Re: Filing W8-BEN forms with more than one brokerage

Post by IdOp »

AltaRed wrote:I have checked my statements once a year or so to ensure my withholdings are only 15%.
I check every distribution as it comes in. The extra work of 15% withholding is negligible.
Post Reply