Thanks for your consideration!
Background:
A dual citizen returning to Canada with stocks and ETFs in a non-registered brokerage account. For sake of discussion, lets say the portfolio is worth
$1 million (a round number to make the math easy). Let's assume 30% or 300K is long-term capital gains. Let's assume, the strategy is to realize these
gains as space in the lower tax brackets is available (for example, 50k/year). Also, to allow the assets to appreciate over time.
My understanding is the following:
i) In Canada, couples file separate returns with each spouse taxed on their income.
ii) CRA would not allow re-titling of assets once you return to Canada.
iii) While in the US, you can gift the shares to your spouse. There is no capital gains payable since the gift does not constitute a transfer.
Question:
Wouldn't it make a lot of sense to re-title the assets such that the gains (and estimated future gains) are split equal between spouses? This would
allow each spouse to realize the gains in lower tax brackets (i.e., 50k/year each in my for example). Does this sound like a reasonable goal/strategy? Perhaps I am over-simplifying/missing something?
Dual Citizen, future Canadian resident and titling assets.
Moderator: Mark T Serbinski CA CPA
Re: Dual Citizen, future Canadian resident and titling assets.
Sounds good.
Remember, you cannot have a non-registered account in US while in Canada, so you will need to transfer these assets to a CDn brokerage. This does not trigger cap gains; be sure that your assets are transferable (ie. no US mutual funds).
And, I'm sure you know, all your assets, for future CDn tax purposes, are re-valued on the day you arrive in Canada, so you will want to sell any losers before becoming resident. Cap losses wont be of much use to you once you leave US.
Remember, you cannot have a non-registered account in US while in Canada, so you will need to transfer these assets to a CDn brokerage. This does not trigger cap gains; be sure that your assets are transferable (ie. no US mutual funds).
And, I'm sure you know, all your assets, for future CDn tax purposes, are re-valued on the day you arrive in Canada, so you will want to sell any losers before becoming resident. Cap losses wont be of much use to you once you leave US.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Re: Dual Citizen, future Canadian resident and titling assets.
Thanks nelsona for your helpful response.
I am not sure why re-titling assets is rarely mentioned as a strategy for dual citizens returning to Canada (in the literature that I have read). It seems to be a useful - somewhat similar to pension sharing.
Cheers!
I am not sure why re-titling assets is rarely mentioned as a strategy for dual citizens returning to Canada (in the literature that I have read). It seems to be a useful - somewhat similar to pension sharing.
Cheers!