Stock transfer from Canada to US

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dimancea
Posts: 26
Joined: Thu Oct 28, 2004 6:35 pm

Stock transfer from Canada to US

Post by dimancea »

I have some Sun Life shares received as a result of the company demutualization. The shares are held by AST Trust Co.(AST). I have changed my residency from Canada to the US and wanted to change the residency status with the AST, so that they can start withholding the nonresident tax from the quarterly dividends. However, AST advised me that they cannot hold the shares in trust for US residents and, upon changing the residency status, they will issue a shares certificate which I can either deposit to or sell through a broker of my choice. I assume that includes US brokers. If I do receive the certificate and sell the shares in the US, do I have to file a tax return in Canada or, in general, what are my reporting obligations to Canada Revenue?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Stock transfer from Canada to US

Post by nelsona »

Due to your move, you will need to fiel a departure return form canada, and since you owned the shares whe nleaving, you will need to report the deemed disposition on that return.

If you are able to find a US brokerage that will accept the shares, then you are quite free to give them the certificate, this would not trigger a second "disposition". When you eventually sell in US, you would only owe on the gain made after leaving Canada.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
nelsona
Posts: 16806
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Stock transfer from Canada to US

Post by nelsona »

The sale once oin US would only be reported on your US tax return.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
dimancea
Posts: 26
Joined: Thu Oct 28, 2004 6:35 pm

Re: Stock transfer from Canada to US

Post by dimancea »

Thank you Nelsona. Actually, I left Canada a few years ago, but never changed my address with the company holding the shares. I have been reporting the dividends on my Canadian return, but the trustee did not withhold the non-resident tax. Eventually, Canada Revenue caught up with me and I paid the difference between the tax on dividends I paid and the withholding tax which was somewhat higher. At that point CR advised me to change my resident status with AST. I understand that by changing my residence to the US, the transfer of shares to my new US address in the form of a certificate, or an electronic transfer to a US brokerage account, will be deemed as a disposition of shares and I will have to pay capital gains in Canada. As I understood from your post, the cost basis of my shares deposited in a US account will be whatever the stock price is at the time of transfer. Is that correct? My follow up question is how would I report the capital gains in Canada? You mentioned a departure return form. Would that be the right form in my case, since I left Canada a while ago, or is there another way to report it.

Thanks again.
nelsona
Posts: 16806
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Stock transfer from Canada to US

Post by nelsona »

The deemed didposition occured when you filed your departure return, NOT when you transfer the shares to a US brokerage. That was the end of any capital gains owed to Canada. Only dividends were to be taxed, by flat rate withholding.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D
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