Canadian Citizen relocating to US

[iristopher]

I'm currently considering an internal job transfer to the US location and have some questions about the tax implications. Since I don't plan on coming back to Canada for a while, my goal is to become a non-resident to Canada. Here is my current situation and some related questions:

1. House: I'm planning to sell, however, I don't know if I should take the cash with me now since the CAD->USD exchange rate is terrible at the moment. Can I leave cash in a bank account in Canada?
2. RRSP + Spousal RRSP: I'll leave them open in Canada. Anyone know if Questrade allows me to trade even after I become a non-resident?
3. TFSA: I'll cash out and close the account.
4. Bank accounts: Do I need to close all my bank accounts to become a non-resident?
5. Credit cards: Do I need to close all my Canadian CCs to become a non-resident?
6. Restricted Stock Unit (RSU) from my job: I have some RSUs that will continue to vest in Canada for next few years. Will there be withholding tax on the vested amounts from CRA and/or IRS? Is there any way to avoid this withholding tax? Also, does this Canadian income prevent me from becoming a non-resident?
7. Private investment that generates interest income (T5 issued): Will there be withholding tax on the interest income from CRA and/or IRS? Also, does this Canadian income prevent me from becoming a non-resident?
8 Life insurance: Can I keep it open and continue to pay from my US bank account in the US? Will the payout be taxed on any side of the border if I die while both I and my beneficiary are living in the US? (i.e. Estate tax in the US)
9. When should I sell my house, close the bank/TFSA/CC accounts, and transfer cash to the new US bank account w.r.t. the move? Do I need do all these before the move or can I do them after I move? If I were to do some of these after I move, will I still become a non-resident on the day I move?
10. Is there anything I should be aware of w.r.t. the departure tax?


Thanks!

[nelsona]

1. Yes, you can leave as miuch money as you want in a Cdn bank account
2. Most likey they will not, but they would be the ones to check with. There are other brokerages (TD direct is one) that will.
3. yes
4. See 1
5. No. I would keep one no-fee crfedit card for Cdn transactions, ties to one of your Cdn bamk accounts.
6. these will be taxable in canada. Investm,ents do not make you or keep you Cdn resident.
7. See 6. You cannot hold a brokerage account in canada while living in US.
8. You can keep it, but you should set up payment from your Cdn account.
As a US taxapayer you fall under the US estate tax laws. Insuarnce payouts fall under those rules.
9. See all previous answers. You will becom e Cdn emigrnat on the day you move to US and will file a departure return for that year.
10. Read the emigrant section of the CRA website, and the rules on deemed disposition.

[simplelife]

1. I would like to suggest another solution, and perhaps nelson can confirm if this is a good idea.

After some research, I found one bank (EverBank in Florida) which allows you to hold CAD. It is a fully FDIC insured bank, which offers all standard banking services, as well as an account called (World Markets) where you can hold all your CAD (other currency accounts also are available).

I am planning on wiring my CAD from Canadian account into Everbank.

Since Everbank is a US company, you will not need to be filing FBAR/FATCA and whatever other yearly reporting requirements US has for its residents.

Seems to make sense.

[nelsona]

Thanks for the info.

A modest Cdn bank account would still be useful, to pay for Cdn bills, but this is a good way of holding some CDn money in US.

[nelsona]

simple,
not quite a bank account, but useful for holding currency (although why would one hold no interst currency, as I said earlier.)

This is a business account by the way.

[iristopher]

Thanks for all the replies. I have some follow up questions:

About #4, is it okay to make periodic transfers into Cdn bank account? I may need to do this to fund my monthly LI withdraws.

About #6, income will be taxed in Cdn rate, right? Will I be double taxed in US?

About #7, this isn't through a brokerage account. It's more like I lend some money to a friend for a quarterly interest payments. I'm guessing this income will be taxed in Cdn rate. Will I be double taxed in US? Does this prevent me from becoming a non-resident?

Do I need to cancel driver license and OHIP when I move OR do I just let them expire?


Thanks!

[nelsona]

4. Of course
6. You will get credit for the Cdn tax on your US return. This is often considered like wages, so if it is less than 10K in a calendar year, you are exempt from Cdn tax if these are considered options. Taxable in US of course
7. Interest is not taxable in Canada when paid to a non-resident. Financial matters do not make you resident of Canada. Taxable in US.

[iristopher]

[quote="nelsona"]6. You will get credit for the Cdn tax on your US return. This is often considered like wages, so if it is less than 10K in a calendar year, you are exempt from Cdn tax if these are considered options. Taxable in US of course[/quote]
Does this depend on the amount of RSU income? What happens if it's more than 10k in a year?

[quote="nelsona"]7. Interest is not taxable in Canada when paid to a non-resident. Financial matters do not make you resident of Canada. Taxable in US.[/quote]Isn't this considered secondary residential tie which could be used by CRA to reject my non-residency?

Lastly, do I need to file NR 73?

[nelsona]

If your wages from a particular Cdn source are more than 10K then it is taxable.
No NR73 is needed