I'm interested in registering a single share and enrolling in a DRIP plan that offers a SPP.
Is it possible to have a DRIP set up as an Tax Free Savings Account (TFSA)?
I've seen on CIBC Mellon's site they make reference to a CIBC Mellon Trust RRSP but can't find any additional info on how you'd get them to set up a DRIP as an RRSP and no reference is made about TFSAs.
Sure. Open a TFSA. Transfer stock in (as a share certificate in your name). Advise your broker you would like to DRIP the dividends. Transfer out any residual cash (they'll only DRIP full shares) and use the company's SPP to convert the residual cash into shares. In the following year you can deposit another share certificate for that year's contribution which will include a few extra shares from your SPP contributions. Check that your broker will not charge for taking your contribution as a share certificate.
Note that as I understand it, this method will potentially incur capital gains every time you move shares from your DRIP to your broker. This is considered a sale and rebuy, even though it's just a transfer to yourself.
That is correct. You are not just transferring according to Revenue Canada. You are "selling" a security which is a deemed disposition and then sheltering future cap gains by placing those same shares in a Tax free account. For this reason I have moved REI.UN, PVE.UN and FAP to my TFSA in this manner as I believe in three things:
1. There is little or no capital gain in the initial transfer process
2. I want to shelter future capital gains
3. I want to shelter future dividends, and particularly in the case of FAP, interest bearing dividends.
I am considering buying my future shares through BMO investorline account TFSA. Doing this means they will keep track of all ACB. What are the negatives to doing it this way as apposed to doing an OCP with the transfer agent and then moving the money?
Am I the only one who actually enjoys keeping track of their ACB? I have a tab for each company with a summary of shares purchased along with cost to easily calculate it. Then I have another tab with a calendar showing which stocks pay divis which month. I have each tab linked to the calendar and it therefore automatically populates. I enjoy seeing my annual divi total increase with my recording of each ACB.