Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
I found you on your expat Youtube channel after doing some googling around to find some answers to some questions that I had.
I’ll be receiving an an inheritance from a relative in Texas some time in the next few months. Most of the money is in a Fidelity investment accounts down in the US.
I’ve already spoken to the investment specialist that is managing the account and they are asking me for a US address to keep the account opened. If not they said they need to liquidate the account and pay a bunch of tax. They suggested that I use a relatives account in the US.
Seems like a lot of trouble to keep the investments in the US. Is there any advantage to keeping the investments in the US? I would much rather have the money transferred up here but I certainly don’t want to pay tax on any amount unnecessarily.
Sounds like you’re getting some fairly awful advise from the US advisor.
If the Fidelity advisor is not properly licensed to help with Canadian residents simply putting a US address on the account will not solve the issue. Not only does this not solve the licensing issue it would actually be a violation of securities laws.
In almost all cases it doesn’t benefit Canadian residents from holding investments in the US. By leaving the assets in the US you would be subject to onerous T1135 foreign income reporting filings, the US advisor will not review the portfolio for Canadian-centric tax planning and foreign currency risk will not be properly addressed.
You’re best bet is to simply move the investment up to a Canadian investment account once the funds become available. By doing so you’ll limit the complexity of your T1135 filings and ensure proper Canadian planning can be executed on the account. Also, if the funds are transferred up in kind you’ll want to ensure that the cost basis’ are adjusted to reflect the FMV on the date of death of your family member.
it’s not clear from the email below if you’re also a US citizen. If this is the case you may want to have a cross-border wealth manager review the accounts for efficiencies and changes.
If you need help with the transfer please send me an email or shoot me a text to 250-661-9417.
Hope that helps.