U.S. residents returning to or moving to Canada can include dual citizens of the U.S. and Canada, Canadian citizen-U.S. green card holders, and Canadian citizens who have worked in the U.S. under an immigration visa and are now moving home.
U.S. residents moving to or returning to Canada must first consider the most optimal path to Canadian immigration. If U.S. residents are already Canadian citizens, immigration to Canada becomes a non-issue. However, Canadian citizen green card holders who are moving back to Canada often wonder if they should surrender or maintain their green cards.
There are various tax and immigration implications that result from choosing either course of action. For instance, surrendering your green card after having lived in the U.S. as a permanent resident for at least eight of the past 15 tax years triggers expatriation tax, but keeping your green card means that you must file U.S. resident tax returns as long as you retain the card. While maintaining a green card has some obligations, it also confers rights and privileges, such as easy entry to and from the U.S. The ideal answer to the question of whether or not to keep one’s green card after returning to Canada depends on each person’s unique situation and relevant tax and immigration factors.
For U.S. citizens moving to Canada and Canadian citizens returning home from the U.S., one of the most important questions is what to do with U.S. assets such as 401Ks/IRAs, U.S. real property and revocable trusts. To effectively handle these U.S. assets, it is necessary to analyze and understand the tax treatment of each one. Sometimes it is more appropriate to leave an asset as is; sometimes it is more beneficial to restructure it. Ideally, a restructuring strategy will be employed prior to moving and becoming a Canadian tax resident.
U.S. residents moving to or returning to Canada must also pay close attention to their tax filing obligations. U.S. persons must make a variety of cumbersome IRS tax filings even after they move to Canada and become Canadian tax residents. These filings include everything from routine income tax filings to FBARs, FATCA filings and filings related to Canadian trusts and corporations.
Since the cross border landscape is so complex, we work with U.S. residents moving to or returning to Canada by analyzing their complete financial picture and offering tax-advantageous planning solutions in order to protect and effectively grow their net worth in Canada. We also help U.S. persons who move to Canada navigate their cross border tax filing obligations on both sides of the border.
Typically, we work with our clients to create customized cross border financial plans that serve as roadmaps to moving to or returning to Canada. (Ideally, cross border financial plans are created 6-12 months prior to moving.) We not only provide our clients with a comprehensive financial plan, but we also provide detailed guidance on implementing our suggestions.
If you think we may be of service to you, the first step is to request a consultation with our team of professionals.