Advisor’s Edge – No cross-border relief for tax-advantaged savings plans

by Nov 1, 2018Article, News

We are very pleased to share that Jonah Ravel and Matt C. Altro were asked to contribute an article for Advisor’s Edge, which was published on October 30, 2018. The article titled “No cross-border relief for tax-advantaged savings plans” investigated cross-border tax complications for Americans and Canadians holding certain types of tax-advantaged savings plans. Specifically the considerations for Canadians and Americans holding RESPs, 529 plans, ABLE accounts, RDSPs, TFSAs, and Roth IRAs.

To read the article you can see it in part below, or click here to view it on the website.

No cross-border relief for tax-advantaged savings plans

Jonah Ravel & Matt Altro
Advisor’s Edge
October 30, 2018

Both Canada and the U.S. allow investors to create tax-advantaged savings plans. Unfortunately, neither country recognizes the tax-preferred status of the other country’s plan. When a client holding one of these accounts moves across the border, complications arise.
This isn’t a problem for traditional retirement plans (e.g., private pension plans, RRSPs, and U.S. IRAs), which qualify for tax deferral in the other country under Article XVIII of the Canada-U.S. Tax Treaty. However, no cross-border relief is available for the following tax-advantaged accounts:

  • education savings plans (RESPs and U.S. 529 plans);
  • savings plans for those with disabilities (RDSPs and U.S. ABLE accounts); and
  • tax-exempt savings plans (TFSAs and U.S. Roth IRAs).
Jonah Ravel

Jonah Ravel

Cross Border Financial Planner

Matt C. Altro

Matt C. Altro

President & CEO

MCA Cross Border Advisors, Inc. is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.>