Can you roll over Roth IRA accounts as a Canadian Resident?

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heiwang88
Posts: 13
Joined: Mon Nov 09, 2020 12:12 am

Can you roll over Roth IRA accounts as a Canadian Resident?

Post by heiwang88 »

I am a US GC Holder who is moving back to Canada. I am soon going to be giving up my GC as I plan to stay in Canada permanently. I have an IRA / Roth IRA account in the US which I plan to hold in the US until I retire. I have not made contributions to my Roth IRA since becoming a Cdn Resident.

From other posts here, I understand that on my first year of filing taxes, I need to file an one time election to the CRA for the Roth IRA so that it will continue to growth tax-free + withdrawl tax free @ retirement.

I've heard that the policies regarding Roth IRA accounts for Non US residents may change overtime at Fidelity (or other custodian firms). Some may restrict trading in the future, so I want to prepare for the worst and open an additional IRA account before I lose my US address. This way, if the policy changes at Fidelity such that they restrict trading, I can transfer it to another Roth IRA at another bank.

My question is:
1. When transferring a Roth IRA from 1 firm to another as a Canadian Resident, is this a taxable event from CRA's standpoint?
2. Do I need to tell them about this 'other' Roth IRA (with $0 inside) when I file my one-time election?
3. When I do this transfer in the future, how do I let the CRA know that it is a transfer and not a new contribution to the Roth IRA account?

If anyone's in the same boat, let me know if you have any advice. Thanks!
dualblues
Posts: 28
Joined: Tue Mar 16, 2021 1:50 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by dualblues »

Hi heiwang88

I am a dual resident returning to Canada. I have done some reading on the topic (definitely not a tax expert).

1. Roth-Roth and pre-tax(IRA/401k) to pre-tax(IRA/401k) are not taxable events from CRA's perspective.
2. I don't think you will be allowed to open an IRA or Roth with $0 balance. Perhaps having 2 accounts funded would make you sleep easier? Also, choose your brokers carefully. Scwabb and Fidelity were recommended to me. Definitely contact your chosen broker and ask them what will happen when you update your address to a Canadian address.
3. I dunno - perhaps paperwork provided by brokerage?
heiwang88
Posts: 13
Joined: Mon Nov 09, 2020 12:12 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by heiwang88 »

Thanks for the reply!

Regarding (2) - I think it's very difficult to get a written statement from my brokerage confirming this. I am with Fidelity. It's almost as if they don't want to be caught saying something on paper. I just tend to get transferred around when I call in. Did you have success getting any sort of written statement from Fidelity/Scwabb? I read from another post that AmeriTrade allows non US residents to trade freely in their IRA/Roth IRA account, but I will have to call in to find out more.
nelsona
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Location: Nowhere, man

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by nelsona »

To the original questions:
1. It is not a teaxable event, but more importantly it is not considered a "Canadian contribution", which would break the tax-free nature of the Roth.
2. Yes, you need to report the existence of all Roths or Roth401(k)s you hold when you arrive in Canada, with the required statement'
3. You do not need to advise them of such changes. It is only the first year election that must be made.

As to finding a broker in US, you need to be sure to find this before moving, the transfer can be done later. Schwab accepts Roths and IRAs held by Cdn residents, as long as you were once a US resident.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
heiwang88
Posts: 13
Joined: Mon Nov 09, 2020 12:12 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by heiwang88 »

I was investigating if Schwab would allow me to hold an IRA as a Cdn Resident. This is only via chat, but based on this response, he is saying no. This seems inconsistent to what others have found..

I find it difficult to know if I am speaking to a rep who just doesn't know the policies or if I should take their word for it.

How have people been able to get the right info? Or get transferred to the right department to talk to the right folks?

Me:
"I see, got it.

I want to inquire about this because while I currently am a US Person living in the US , I do have plans to move to Canada in the future. I understand that some of the firms have different policies regarding a US person holding these IRA/Roth IRA accounts as a US person living abroad. I just want to understand the policies at your firm, and if they do work well, I may transfer my existing IRA & Roth IRA to Schwab.

I understand that for some firm, they restrict trading / freeze the account if the address associated with the account is a Canadian address. I just want to understand if this is the case with Schwab.

1:19 PM
John G
Agent John G said
We are only able to offer IRAs to US residents. If you were to move outside of the US, we would ask that you transfer the account to another provider who offers IRA accounts for those living outside the US.
"
nelsona
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Location: Nowhere, man

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by nelsona »

For Schwab, you need to specifically contact Schwab International Client Services
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
heiwang88
Posts: 13
Joined: Mon Nov 09, 2020 12:12 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by heiwang88 »

Will give it a try. Thanks Nelson!
dualblues
Posts: 28
Joined: Tue Mar 16, 2021 1:50 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by dualblues »

Hi heiwang88,

I can share a data point on Schwab:
I spoke with Schwab and Schwab International last week (as per nelsona's suggestion). They indicated they would hold the IRA/Roth IRA and transfer it over to their International Client Services when I update to a Canadian address.

Would love to hear if you get the same answer :).

Cheers!
heiwang88
Posts: 13
Joined: Mon Nov 09, 2020 12:12 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by heiwang88 »

I called into Schwab (international account) today and based the conversation I had with the representative, they are saying that they can maintain (and even open an IRA acct as long as you have a SSN) after a US Person moves to Canada. However, they said the account would be limited to selling only.

Is this consistent with what you've found? If you've already updated your account to have a cdn address, are you still able to trade freely or is the account restricted?
nelsona
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Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by nelsona »

My rep said manage and trade would be possible.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
dualblues
Posts: 28
Joined: Tue Mar 16, 2021 1:50 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by dualblues »

Hi heiwang88,

Here is what I was told with respect to IRA/Roth IRA at Vanguard, Fidelity and Schwab. Perhaps the most meaningful finding was that the answers are inconsistent (they vary with the moon phase :).

Vanguard IRA/Roth IRA
----------------------------
- person: Joseph
- Assumptions: US Citizen and changing address to a Canadian address:
* Yes, you can continue holding the account.
* NO purchases or exchanges.
* re-investment of dividends and capital gains can still be done
* You can withdraw assets, however, there may be some hoops to go through. That is, you cannot make redemptions from brokerage account (there may be another way to accomplish this indirectly?).

Schwabb IRA/ROTH IRA
-----------------------------
- Global Services Team: (1-877-686-1937)
- Assumptions: US Citizen and changing address to a Canadian address for IRA/Roth IRA
* Yes, you can update the international account.
* The international accounts will have restrictions:
* You cannot purchase US mutual funds, no US ETFs or US ETNs - you can only liquidate.
* Dividend re-investment is not allowed.
* Yes, you can purchase US stocks.

Fidelity IRA/Roth IRA
--------------------------
- person: Tyler transfered to John;
- Assumptions: US Citizen and changing address to a Canadian address.
* Yes, you can continue holding account.
* There are no restrictions on the account.
* (Normal tax treatment - w9 for US Citizen)

Cheers
dualblues
Posts: 28
Joined: Tue Mar 16, 2021 1:50 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by dualblues »

BTW, I have exchanged messages with someone that has a Schwab IRA/Roth IRA and said that Schwab would not allow them to open a new account..but, were allowing them to hold and use existing accounts.
CRAIRS
Posts: 5
Joined: Mon Sep 27, 2021 3:37 am

Re: Can you roll over Roth IRA accounts as a Canadian Resident?

Post by CRAIRS »

dualblues and heiwang88 thanks so much for sharing your experiences, very helpful info! did you guys end up going with fidelity? seems like the best deal. I had heard that schwab was the most flexible and fidelity not allowing canadian residents to open up accounts, but that seems to be the opposite based on your experience, dualblues.

i am going to try calling schwab and fidelity to confirm. also would be interested in the difference between opening a new account up before leaving vs. once in canada. i will have to transfer from vanguard. wish it was easier investing as a US expat
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