what to do with RRSPs in Canada when you move to US?

If you have a investments in RRSP, personal and business (non-registered) in Canada, what happens to them when you leave to work in the states on TN or H-1B? Leaving to work in the states I guess mea...

Canadian Expatriate and Travellers Forum Index -> Canadians in the USA -> US Visas and Immigration

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mark
Junior Member

Joined: 01 Oct 2006
Posts: 11
Location: canada

Posted: Thu Mar 06, 2008 9:19 am

If you have a investments in RRSP, personal and business (non-registered) in Canada, what happens to them when you leave to work in the states on TN or H-1B? Leaving to work in the states I guess means I'll become a US resident for tax purposes

Must you sell all your investments or can you just leave them in Canada?

Steven
CanuckAbroad VIP

Joined: 28 Sep 2007
Posts: 1354
Location: Calgary

Posted: Thu Mar 06, 2008 10:16 am

You only become a US resident for tax purposes if you don't claim a closer association to Canada via IRS Form 8840. If you're only going for a short period (say a couple of years) it's usually best to stay a resident of Canada for tax purposes as it can save a lot of time and paperwork.

But there are obviously tax advantages to being in the US (i.e. lower rates of tax).

This explains it in simple terms: http://www.cra-arc.gc.ca/E/pub/tg/p151/p151-07e.pdf

If you remain a resident of Canada for tax purposes, obviously your RRSP is unaffected.

If you become a resident of the US for tax purposes, then income from the RRSP is taxed in the US. And there is no tax advantage to contributing to it anymore as the US doesn't consider it a tax shelter.

http://www.professionalreferrals.ca/article-723.html
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Steve.

Reba
Moderator

Canuck in NC

Joined: 16 Jul 2004
Posts: 1284
Location: North Carolina

Posted: Fri Mar 07, 2008 4:26 am

When I moved I cashed mine out and closed them. But I moved because I married an American, not for a job. Although I would dearly like to return to Canada permanently, we don't know if we can so I figured it would just be better to sever all ties to save myself additional paperwork at tax time every year.
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