Interactive Brokerage and Dual Citizen returning to Canada

[dualblues]

Thanks for your help!

Following "best practices" for a dual citizen relocating from US to Canada, I wish to consolidate IRA/Roth IRA to a brokerage that is expat friendly:
i) won't liquidate or freeze my account when I change my address to a Canadian address;
ii) will respect tax treaty (!5% with-holding of distributions with W9);
iii) well-established and supports self-managed accounts (I prefer to manage investments myself rather than paying a boutique brokerage a 1% for financial planning).

I have read Interactive Brokerage recommended many times (and I have a brokerage account with them already). After extended wait times, I have discussed my needs with several representatives from IB. They insist that there will be issues if I update my address to a Canadian address on an IRA or Roth IRA account. They cited a page that indicates residents of Canada cannot open an IRA with them: https://www.interactivebrokers.com/en/index.php?f=14429 . I told them my case was a little different than their knowledge byte since I would be establishing the accounts while still a US resident (and updating address once I move). They say that they don't support a Canadian resident holding an IRA account.

Can anyone share their experience using Interactive Brokerage to hold their IRA as a Canadian resident? I am not sure if their policies have changed or I am just not talking to the right person at IB. Since these are my retirement funds, it is important to make sure my strategy is compliant and coherent.

Cheers!

[nelsona]

AS a US citizen, you won;t be subject to 15% withholding, you will be withheld on a graduated basis (the 15% doesn't apply to US citizens).

I have never heard of IB being one of the favourable brokerages around here for accepting Cdn addresses, so I don;t know where youare hearing good recommendations. Schwab and Fidelity are. Vanguard is not.

[dualblues]

Thanks for your help nelsona,

This is super helpful!

Indeed, I was mistakenly looking at IRS distributions to foreign persons. I think I get it now:

1) I would use the W9 to prove to the withholding agent that I am a US person.

2) A US person residing in the US could use W4-P (https://www.irs.gov/pub/irs-prior/fw4p--2020.pdf) to elect different with-holding amounts (even no withholding). Since my payments would be delivered to an address outside the US, my withholding would be table based (for periodic payments) and 10% for non-periodic payments.

* Am I correct in assuming that if the with-holding exceeded my tax liability, it would be refunded when I file my taxes? *


Thanks for the brokerage recommendations - I will contact them.

With respect to the Interactive Brokerage being good for expats...I spent lots of time "reading the tea leaves" on various forums. Folks indicated that Interactive Brokerage was Canadian expat friendly in the Mr. Money Mustache forums. This article mentions Interactive Brokerage as "friendlier to expats" and suggest they may be able to accept an IRA in the comments: https://moneymattersforglobetrotters.co ... -overseas/ Also, I saw an article discussing Interactive Brokers expanding expat operations in Europe (picking up vacuum created by other brokerages not supporting expats): https://americanexpatfinance.com/news/i ... g-overseas Here's another mention of Interactive Brokerage as one of the best brokerages for expats: https://usexpatinvesting.com/educationa ... or-expats/

Various forums have been positive on Schwab and TD Ameritrade. However, some commented that Schwab we less welcoming than in past (and Schwab owns TD Ameritrade).

It sometimes feels like I am making financial decisions based on rumor and innuendo :). It seems that the only brokers claiming expertise and support for US expats in Canada are boutique brokerages.

I really appreciate your expert help!

Cheers

[nelsona]

You will be filing a US tax return, and that will determine your US tax liability. If you have overpaid, you will get a refund, otherwise...