Canadian inheritance in year I become nonresident on TD visa

Bellasteena · Post by **Bellasteena** » Mon Jan 09, 2017 9:14 am

We are moving to the US this year for my husbands new job. He has a TN visa and my son and I will be getting TD visas. We plan to sell our house and break most secondary ties to become non residents. I will be inheriting about $300,000 CAD from my mom's estate this year. I do not want to put this into a RRSP as it would become taxable income when I cash it in. If I invest it in a non registered account it seems that I would have to pay departure tax on it. The best that i can see is that I can only have it in a canadian bank account. Can I transfer the money to the US once I'm a resident and invest it there? I'm not sure what I can do in the US on a TD visa.

nelsona · Post by **nelsona** » Mon Jan 09, 2017 9:45 am

First off, let's clear up some misconceptios:
1. Unless you are financially dependent on your mother, which is doesn't appear to be the case, you are NOT entitled to transfer these monies into an RRSP, other than using whatever normal contribution room you might have. RRSPs can only be transferred to surviving spouses. So the RRSP isn't really an option in any event. Just in case that is aht you were thinking. You will simply get cash from mother's estate.

2. The reason not to put it in an investment account in Canada before you leave is that you will not be allowed to keep that account active once you leave Canada. You shouldn't worry about departure tax, as the only tax would be on the minimal growth it would make between the time you invested it and the time you moved.

So a bank account to hold the money, even a GIC would be best for short- and medium-term, then move some money down to a US bank , and/or broker later when you can (see 2 below). same for any other large sums of money you might have at departure.

Some things you need to consider before moving:
1. make sure your and spouse's current RRSP brokers allows you to manage your account from US. MOST do NOT.

2. You can move the money to a US broker once in US. You should be able to open an account once you get an ITIN from IRS (after you and spouse file a tax return -- which would only be in spring 2018). Rules on getting accounts without an SSN (you are not entitled to an SSN while on TD -- your TN spouse is). So you might right now be looking for a US brokerage that would accept you before or after getting an ITIN.

3. Be warned that life on TD without SSN can be difficult, as you are essentially a non-person financially for a while. Even your spouse will have trouble while his SSN "ages" a little and he gets some credit history. You may even have difficulty getting a drivers license in your state without an SSN.
His firm should be helping him transition (good firms do , at any rate), but you might be doing some investigation prior to moving so that you can knock down as many obstacles as possible.

nelsona · Post by **nelsona** » Mon Jan 09, 2017 9:48 am

Some have found success by linking up with the US arm of one of the big Cdn banks (TD, RBC, BMO). Some have accounts specifically for those in your situation. they can also help with credit history issues.

I'd look into this PRIOR to moving.

Bellasteena · Post by **Bellasteena** » Mon Jan 09, 2017 11:02 am

Thank you for your quick reply. His firm is providing a lot of assistance, I'm just trying to wrap my brain around the logistics and timing of everything. Also, I will be keeping my inheritance separate from our joint accounts so I wasn't sure of the implications of the TD visa.

nelsona · Post by **nelsona** » Mon Jan 09, 2017 11:49 am

Finances have no implication on TD status.
There are no timing issues.
Unless your move to US is well past July, you will be filing a full-year 1040 in US, so you should have (or should be) addressing the following :

Close any TFSA, reassign any RESP to a grandparent, ensure your RRSP management will be with a frim that is allowed to deal in US.
This would best have been done in 2016, but no time to waste now.