Just wondering if someone could clarify this issue. I have a RSP, TFSA and non-registered accounts with TD Direct Investing. If moving to the US, I know I can keep the RSP as is (no contributions), the TFSA has no status in the US, and the non-registered holdings would be subject to deemed disposition rules.
I had been under the impression that if I go to the US for just a few years and come back, I can keep my accounts as is. I spoke with TD and they told me my non-registered holdings would have to be transferred to a US discount broker. So now I am confused.
So, would someone be able to clarify what the rules are regarding the Canadian discount brokerage while residing in the US. Specifically
1) Can you keep the entire account in Canada while living in the US
2) If you can, are you allowed to make any trades or are the investments locked in? I doubt I would sell to avoid new headaches with capital gains and not put new money in but would look at reinvesting dividends
Thanks again
Discount Brokerage/Investment Accounts
Moderator: Mark T Serbinski CA CPA
Your impression was incorrect on non-registered holdings. The brokerage *could* allow you to leave them in Canada UNTOUCHED if they felt comfortable with that. Most do NOT. Transferring does noting to their cost basis (deemed disposition does of course, for Cdn purposes). Unfortunately you would not be able to transfer Cdn mutual funds.
So, to answer your question, for Non registered accounts:
1. Only if the firm agrees, and is comfortable that your investments will not require any managing. Most will not accept this risk. it is THEIR risk after all, as they would be the ones violating SEC rules.
2. No you cannot. Even reinvested dividends could be considered improper activity, which is why most brokerages just back-off completely. Since you are subject to deemed disposition, you will have whatever headache you are trying to avoid in any event, so I'm not sure why the reticence to sell simply for that reason.
While we are on subject, your TFSA has no sheltering in US, so is subject to income tax as well as foreign and TRUST reporting, so should be closed before you leave.
So, to answer your question, for Non registered accounts:
1. Only if the firm agrees, and is comfortable that your investments will not require any managing. Most will not accept this risk. it is THEIR risk after all, as they would be the ones violating SEC rules.
2. No you cannot. Even reinvested dividends could be considered improper activity, which is why most brokerages just back-off completely. Since you are subject to deemed disposition, you will have whatever headache you are trying to avoid in any event, so I'm not sure why the reticence to sell simply for that reason.
While we are on subject, your TFSA has no sheltering in US, so is subject to income tax as well as foreign and TRUST reporting, so should be closed before you leave.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best
[quote="nelsona"]Your impression was incorrect on non-registered holdings. The brokerage *could* allow you to leave them in Canada UNTOUCHED if they felt comfortable with that. Most do NOT. Transferring does noting to their cost basis (deemed disposition does of course, for Cdn purposes). Unfortunately you would not be able to transfer Cdn mutual funds.
So, to answer your question, for Non registered accounts:
1. Only if the firm agrees, and is comfortable that your investments will not require any managing. Most will not accept this risk. it is THEIR risk after all, as they would be the ones violating SEC rules.
2. No you cannot. Even reinvested dividends could be considered improper activity, which is why most brokerages just back-off completely. Since you are subject to deemed disposition, you will have whatever headache you are trying to avoid in any event, so I'm not sure why the reticence to sell simply for that reason.
While we are on subject, your TFSA has no sheltering in US, so is subject to income tax as well as foreign and TRUST reporting, so should be closed before you leave.[/quote]
Thanks again. So it sounds like this issue of keeping the non-registered account in Canada is a US thing.
I could live with a 'frozen' account as I'm satisfied with what I have. Its just that I would be back in Canada within a few years for sure and unlike most people, most of my net worth is tied up in the non-registered account. Doesn't seem to have much logic if you aren't going somewhere permanently to liquidate and move everything in that amount. And what if things went off the rails after a few months and to go through all the hassle of actually selling, transferring, then selling and transferring again. Then again, logic doesn't always prevail!
So, to answer your question, for Non registered accounts:
1. Only if the firm agrees, and is comfortable that your investments will not require any managing. Most will not accept this risk. it is THEIR risk after all, as they would be the ones violating SEC rules.
2. No you cannot. Even reinvested dividends could be considered improper activity, which is why most brokerages just back-off completely. Since you are subject to deemed disposition, you will have whatever headache you are trying to avoid in any event, so I'm not sure why the reticence to sell simply for that reason.
While we are on subject, your TFSA has no sheltering in US, so is subject to income tax as well as foreign and TRUST reporting, so should be closed before you leave.[/quote]
Thanks again. So it sounds like this issue of keeping the non-registered account in Canada is a US thing.
I could live with a 'frozen' account as I'm satisfied with what I have. Its just that I would be back in Canada within a few years for sure and unlike most people, most of my net worth is tied up in the non-registered account. Doesn't seem to have much logic if you aren't going somewhere permanently to liquidate and move everything in that amount. And what if things went off the rails after a few months and to go through all the hassle of actually selling, transferring, then selling and transferring again. Then again, logic doesn't always prevail!
Please don't use the quotes, we know what we wrote, and it merely junks up your posts.
As you have seen, it is not whether YOU are comfortable with leaving it in Canada, it is whether your BROKER is. Besides, you are on the hook for deemed disposition tax, so it is as if you sell anyways tax-wise.
As you have seen, it is not whether YOU are comfortable with leaving it in Canada, it is whether your BROKER is. Besides, you are on the hook for deemed disposition tax, so it is as if you sell anyways tax-wise.
After 20 years, I am severely cutting back on responses. Do not ask specifically for my help. There are a few others on this board that can answer most questions. All the best