I would like to become a Cdn resident for tax-purposes and at the same time keep my Cdn brokerage account intact with my Cdn mutual funds in it.
Now I know that some countries, such as the USA, frown on you keeping ownership of your Cdn funds. That being said, if I do this, how would I pay my Cdn tax obligations for dividends that are received in my non-RRSP funds?
As I will be a non-resident, I thus won't be filing Cdn tax returns. And as I will not inform my brokerage of my move, they won't automatically deduct the non resident tax.
Thanks
How does Cdn non-res pay tax on fund income?
Moderator: Mark T Serbinski CA CPA
I assume you meant would like to become <b>non</b>-resident.
First, there is no restriction as to KEEPING a non-RRSP account while living in US, just TRADING is forbidden while physically in US (phoney address or not).
SECOND, the fubnd co has both th responsibility to conduct trades legally, and to withhold tax from non-residents.
So, any inkling that you are not in Canada when you make a trade in your account WILL get that account shut down and sold off (perhaps at a moment that you do not wish). And, it is not unreasonable to expect some sanctions to be sought against you for making illegal trades (the brokerage would heartily co-operate with the regulators in this).
Since the firn would not be withholding NR tax, CRA is quite free to go after THEM as well as you for this tax. The simplest way to avoid this would be to send a letter, expalining your 'oversight' and paying the non-res tax with a check, not filing a return (as there is no provision to do so).
It would not be a stretch for the CRA to then contact broker and ask why they are not collecting NR tax. At this point, their reaction would be similar to what I outlined above.
Bottom line: Since you have to pay deemed dispo tax on all your non-RRSP holdings anyways when you leave, there is no tax advantage for keeping any of these funds after leaving, and a lot of regulatory headaches, as well as systematic lying.
Sell up before leaving, or sell up as you need to soon after (a non-res is always free to SELL anytime, anywhere) and invest in US funds.
<i>nelsona non grata... and non pro</i>
First, there is no restriction as to KEEPING a non-RRSP account while living in US, just TRADING is forbidden while physically in US (phoney address or not).
SECOND, the fubnd co has both th responsibility to conduct trades legally, and to withhold tax from non-residents.
So, any inkling that you are not in Canada when you make a trade in your account WILL get that account shut down and sold off (perhaps at a moment that you do not wish). And, it is not unreasonable to expect some sanctions to be sought against you for making illegal trades (the brokerage would heartily co-operate with the regulators in this).
Since the firn would not be withholding NR tax, CRA is quite free to go after THEM as well as you for this tax. The simplest way to avoid this would be to send a letter, expalining your 'oversight' and paying the non-res tax with a check, not filing a return (as there is no provision to do so).
It would not be a stretch for the CRA to then contact broker and ask why they are not collecting NR tax. At this point, their reaction would be similar to what I outlined above.
Bottom line: Since you have to pay deemed dispo tax on all your non-RRSP holdings anyways when you leave, there is no tax advantage for keeping any of these funds after leaving, and a lot of regulatory headaches, as well as systematic lying.
Sell up before leaving, or sell up as you need to soon after (a non-res is always free to SELL anytime, anywhere) and invest in US funds.
<i>nelsona non grata... and non pro</i>