RRSP access while US resident (ie TN Visa)

[kaktus]

Hello:
Does anyone know.?
Is there a formal list somewhere, of which Canadian banking/brokerage firms, are registered to deal with Canadians that wish access to their RRSP while working in the US (ie on non-immigrant VISAs, like TN etc)?
I understand all about the taxation,ie if you are a US resident you will be taxed on your any RRSP interest etc, thats fine, thats understandable (since US SEC does not recognize Canadian RRSP as a tax-haven directly equivalent to 401K etc). But it certainly makes a lot of sense, for non-immigrant VISA workers, to maintain their RRSP, rather than liquidating it and moving it to the US (only to encounter layoff or other situations when they may return to Canada etc, and then you cant just redump your lessened-RRSP savings back into an RRSP either!).

Any direct info would be great. I dont know why banks etc just dont get registered for this. They certainly deal in much larger cross-border corporate dealings. If you are on a non-immigrant VISA, this should clearly be allowed, since one must maintain ties of some sort.
By being taxed by the US, your RRSP would then behave like a non-registered RSP. You're still a Canadian citizen fully, and within an RRSP you would still not have to be taxed. At least the bank/firm would maintain your account, I thinks theres lots of win-situations for them on this.

Thanks for any thoughts!
Cheers!

[Steven]

Actually you're not taxed on RRSP interest anymore, the 2008 tax treaty treats RRSPs as IRAs for US tax purposes.

Technically from the way the treaty is worded you can simply have both invested in identical investments, i.e. you keep your RRSP, it's treated as an IRA, you invest in an IRA that is invested in the same thing your RRSP was invested in.

The problem is that the tax treaty is so new that I doubt any US financial institution has any experience with this, but it doesn't actually matter anymore, you just open up an IRA and have two separate accounts. There may be some way of merging them but I doubt it's worth the hassle.

Bear in mind you need to file paperwork in the US to declare your RRSPs, IRS Form 8891.

Also, if you are in a non-immigrant category and you keep your tax home in Canada and file as a non-resident in the US, there is nothing to prevent you from contributing to your RRSP as technically you would still be a tax resident of Canada.

On TN-1 you are supposed to have "bona fide non-immigrant intent" so it may not be a wise idea to move your tax home to the US anyway.

Have a read of: http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html

[kaktus]

S:
Thanks for the great info, on the tax treaty,IRA etc, I'll look further into it and post where I get on my situation.

I have learned that federally, the SEC does allow RRSP trades. But apparently still, the particular state you reside in, will still have to be RRSP friendly, the regulator allowing for your particular investment firm in Canada to conduct these trades! (I could be wrong here, but am in process of inquiring with the particular state securities division to determine what they say).
Thanks again,
Cheers!

[Steven]

Like I said it doesn't really matter, just invest in the same thing using an IRA if you're actually going to move your tax home to the US. If you file as a non-resident there is nothing to stop you carrying on with your RRSP as per usual.

[kaktus]

I did determine, that in fact for the state of Arizona,the state has currently registered (42) Canadian dealers, for Canadians working with Canadian account RRSPs. So AZ is RRSP friendly. So thats good news.
They also confirmed apparently its not that expensive, ie $100 annual filing fee for the dealer. I dont know if thats the same for all states.
Another firm,TDW, did confirm that they are fully registered to deal with Canadians on the RRSPs in AZ, only by phone however, not online.
I dont know if I can find an online registered dealer, since it really makes much more sense these days, or whether restrictions will always require only phone trades?Not sure if anyone knows.
Thought I'd share this for now!
Cheers!

[Steven]

A lot of this stuff about phones and on-line guff is because of the Patriot Act, which requires "customers" to appear in person, or for the institution to have "reasonable belief" the person they're dealing with is who they say they are.

The problem is that interpretations vary from bank to bank and institution to institution.

I got so annoyed I looked up the CFR, which specially says that the term: "customer" for the purposes of the regulations does not include someone who already has an account with them, i.e. it's not a new customer so they don't have to check again. However most banks in the US require you to show up even if you already have an account with them, which is not legally required.

In addition, some people seem to be okay with the idea that if you've talked to them on the phone and the caller ID is from a US number that this is a "reasonable belief", because presumably you are legally in the country.

[PaulB]

Hi Kaktus,

One of the main issues with RRSPs at Canadian brokerages is the residency. They become very apprehensive when it comes to RRSP accounts with a US address. The short answer of a complex issue, is that individual securities have to be registered with each regulatory authority in which each client is domiciled.

For instance, a Canadian mutual fund held inside an RRSP is not necessarily available for sale or purchase to US residents because it has not been registered for sale with the US regulators, only in Canada. That is why RRSPs, LIFs, LIRAs etc. are often frozen at brokerages (liquidation trades only). Nevertheless, it is possible to receive advice and to trade in RRSP accounts for US residents and IRAs for Canadian residents.

Not wanting to be solicitous, I am a partner at a firm that is registered with both Canadian and US regulatory authorities and we do advise on such matters. Feel free to send me a PM (Private Message) and I can provide you with more information.

Regards,

Paul