Returning to Canada as Dual Citizens after 10+ Years in US

MaggieA · Post by **MaggieA** » Mon Jul 18, 2016 9:02 pm

I moved my family from Canada to US in 2002 due to a job transfer. Back in the mid-oughts this forum was very valuable to me. Haven't needed to visit in some years, but now we are moving back again, mostly for family reasons (aging parents). My employer, a US based multinational, has agreed to transfer me to their Canadian payroll, however unlike our move down here, this won't be a paid corporate move, so we're doing it on the cheap (downsizing, U-Haul).

Any advice on things we ought to do before departure to assist with taxes and personal finances would be greatly appreciated. We have neglected RRSPs in Canada, I have a 401(K) with my employer here. We acquired US citizenship some years ago, so will be having to cope with US requirements for expats too.

nelsona · Post by **nelsona** » Mon Jul 18, 2016 9:25 pm

Well, you won't have to deal with "expat" issues unless you give up citizenship, which I don't recommend (others do).

Some basic things are to ensure that any US-sourced income due to you is paid to you before you re-establish ties in Canada, or they will be taxed in Canada.

If you have any losing positions in stocks you should trade them before leaving. If you have mutual funds outside your 401(k)/IRA, you will need to sell them. Stocks should be moved to a Cdn broker.

RRSP: you may want to consider collapsing your RRSP before going back, paying the 25% tax (and perhaps a little in US as well) rather than the taxrate you will pay in Canada. That is not a hard set rule.

401(k)/IRA: you could consider converting some of your 401(k)/IRA to Roths before returning (although this may be difficult given that you are transferring), paying the tax in US now afor future untaed gains/income.

MaggieA · Post by **MaggieA** » Wed Jul 20, 2016 6:33 am

Thanks very much. Not intending to relinquish US citizenship.

Have some mutual funds in a non-retirement Vanguard account. Hadn't even been thinking about those. They have to be sold? What about using a US mailing address to hang onto the account? Is this OK, or really not?

nelsona · Post by **nelsona** » Wed Jul 20, 2016 7:48 am

No, this is a securities violation. US brokerage are not allowed to deal with Cdn residents in non-retirement accounts.

It is never good to fake your whereabouts.

MaggieA · Post by **MaggieA** » Wed Jul 20, 2016 12:49 pm

Thanks, not interested in doing anything illegal.

Do you happen to know what the criterion is for "re-establish ties"? Cannot exactly sync payroll transition with action of crossing the border; guessing there's possibly some grace period in which to sever US ties and establish Canadian ones.

nelsona · Post by **nelsona** » Wed Jul 20, 2016 1:25 pm

You will become a Cdn tax resident the day you can occupy a home.
of course, any work done in Canada for the Cdn company will be Cdn-sourced and taxable in Canada anyways, regardless of where you actually live for that/those week9s).

All your income will still be taxed by US due to citizenship.

On the matter of transferring your broker or selling mutual funds, you have no issues as long as you do not buy or swap funds. Holding of selling will not get anyone in trouble in the short term.