Blog post

Question

Hi Phil,

I recently moved from Seattle to Vancouver, and I’ve been working through all the financial logistics of the move. One thing I haven’t figured out yet is what to do with my U.S. brokerage account.

I have about $900,000 invested in a mix of U.S. stocks, ETFs, and mutual funds. My brokerage firm recently told me that because I’m no longer a U.S. resident, they won’t allow me to make trades in my account. That seems like a major problem.

I spoke to a Canadian advisor who suggested moving everything to a Canadian brokerage, but I don’t want to trigger unnecessary taxes or complications.

Here’s what I’m trying to understand:
– Can I keep my U.S. brokerage account while living in Canada?
– What happens if I sell investments—will I owe tax in both countries?
– Should I move my investments to Canada, or is that a bad idea?
– How does the U.S.-Canada tax treaty impact my situation?

I’d love to get your thoughts on how to handle this transition without making costly mistakes.

Looking forward to your advice!

Best,
XXXXX

Answer

Hi XXXXX

Thanks for the email. Yes, most US investment advisors don’t have the ability to manage investment accounts for Canadian residents. Cross-border advisor firms like our that have investment licenses in both Canada and the US is well equipped to help clients in these situations.

Let me do my best to answer your questions below and please feel free to book a complementary consultation with our team here to better help flush our your options:

www.beaconhillwm.ca/meet

• As mentioned above, no. You’ll need to move the account to a cross-border investment advisor that has the appropriate regulatory licenses in Canada and the US.
• Cross-border tax can be quite complex and specific to each taxpayer’s situation. That being said, you shouldn’t have to pay net tax to both countries. In most cases capital gains will be levied on sales in Canada only (this can get complicated).
• Yes, if you are moving to Canada permanantly it’s best to have all your assets in Canada. Any US retirement plans like 401k, IRA and ROTH IRA can be held by a Canadian investment advisor that has a US license.
• One of the main reasons why the treaty is in place is to mitigate against double taxation. In you case you’ll be required to report and file both in Canada and the US. In order to avoid double taxation you’ll claim foreign tax credits on each respective return to avoid this potential of double tax. The treaty also have sections that contains how US social security, CPP and OAS is taxed for Americans in Canada.

I hope that helps and don’t hesitate to book a call using the link above if you want to chat further about your cross-border investments.

Cheers

Phil