ARE THERE WITHHOLDING TAXES FOR MY BENEFICIARY?
Withholding tax is determined using a schedule prescribed by the Canada Revenue Agency (CRA)
|Account Balance||Rate of Tax Withheld|
|$5,000 or less||10%|
|$5,001 – $15,000||20%|
|$15,001 and over||30%|
For example, if your account balance is $5,500 when you die and your beneficiary chooses to receive the payment directly, he or she will receive $4,400, and $1,100 of withholding tax will be sent to CRA. The beneficiary will receive a T4A to file with his or her income tax return and may be eligible for a refund of all or part of the tax paid.