Should I sell all my investments before moving to Canada?


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Cross-Border Tax and Investment Specialist


My wife and I will be moving to Victoria by the year of the year. My accountant told me a good idea would be to sell all my investments before I move to Canada so that Canada doesn’t tax them if I sell them after arriving.

We have sizeable investment accounts and I’m reluctant to liquidate the portfolio as I would simply buy most of the positions back after I sell them.

Is there anything I can do to avoid having to sell and rebuy my stocks? If I have to I will because I certainly don’t want to pay Canadian tax on all my current gains (about $800,0000).

Any thoughts?





Thanks for the email. Unfortunately it looks like you received bad advice from your accountant. When you move to Canada the Canadian government will not tax you on accumulated gains that accrued before you moved to Canada. For example, if you bought Apple stock for $100,000, moved to Canada when it was $200,000 and then sold it when it was $250,000 you would only be liable for Canadian tax on a $50,000 gain (it would need to be converted to CAD). The reason for this is that for Canadian tax purposes all your assets are revalued for tax purposes when you enter Canada. The way they accomplish this is to ensure your investment cost basis’ are adjusted to fair market value on the day you entered Canada. In the example above the new cost basis (or ACB) of Apple stock for Canadian purposes would be $200,000 or the fair market value of the stock when you entered Canada. If you then sell the stock for $250,000 your gain (less cost of $200,000) would be $50,000. Of course, you’ll need to ensure you properly convert the amounts to CAD.

Although you won’t need to liquidate your portfolio you will want to strongly consider moving the investments to Canada to ensure you can properly plan for your portfolio from an investment and tax perspective. Leaving the account in the US would result in significantly complicated and expensive foreign asset reporting (T1135). If left in the US the investments would need to be disclosed on an asset by asset basis which can be terribly expensive to have someone prepare and file. If moved to Canada the US investments will only need to be disclosed as one figure on a country by country basis.

Whenever possible it’s a great idea to properly calculate all these new cost basis’s from the US investment accounts and keep them in your records until such time as the assets are sold. Once sold you’ll have the new Canadian cost basis’ available to calculate capital gains for both US and Canadian purposes.

I hope that helps and please let me know if you have any further questions.





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