Locked-In RRSP

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xevier69
Posts: 1
Joined: Wed Sep 04, 2019 8:51 am

Locked-In RRSP

Post by xevier69 » Wed Sep 04, 2019 9:12 am

Hi,
I'd like to get a word of advice on the following.
Back in April 2001 I was transfered by my employer from Ontario to US. For the first three months of 2001 I still worked in Canada and then in 2002 filed the taxes for the very last time. When we moved (with my wife) we liquidated all our assets except for the bank accounts. She had a small balance of RRSP loan which we paid off shortly after and I have a Locked-In RRSP account. Since we moved we had no canadian income, dividents, etc. Now 18 years later I'm trying to close on that RRSP account that has been sitting without growing and when contacted the bank (account holder) I was told that I need to file N73 form in order to determine my residency. Once I'm confirmed a non-resident the account will be released and closed. As per CRA I have to be a non resident for 2 years. I'm still under 55 so either way I cannot do anything about it. Would it be better to wait another 5 years and then close that account but... then that would be considered as a taxable income in Canada and I would have to file income tax... correct?
The question I have is... are there any complications that I'm facing with CRA by filing N73? Is there anything I should be aware of or somethign that can deny my non resident status? We're both green card residents with US born kids and in process for US citizenship.
Your comments and advise is greatly appreciated.

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Locked-In RRSP

Post by nelsona » Thu Sep 05, 2019 5:45 pm

You do not need to wait until 55 to collapse a LIRA if you are non-resident, which is the reason for the NR73.

The entire withdrawal will be taxable in both Canada (25% withheld) and US (as pension) with credit given for the Cdn tax.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

nelsona
Posts: 15980
Joined: Wed Oct 27, 2004 2:33 pm
Location: Nowhere, man

Re: Locked-In RRSP

Post by nelsona » Thu Sep 05, 2019 5:46 pm

You are undeniably a non-resident so I would not worry about that. You won't have to file a Cdn tax return, as the 25% tax is final.
Nelsona Non grata. Non pro. Search previous posts. Happy Browsing :D

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