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QUESTION:
Help!
I'm a British citizen, U.S. green card holder with significant assets in both a traditional U.S. IRA and a Roth IRA.
I will be moving to Canada as a permanent resident early next year, and want to know what the best way is for me to handle my IRA's, without incurring U.S., Canadian (or British) taxes.
My concern is that if I leave the IRA's where they are, the U.S. will decide at some point that I have "abandoned" my U.S. permanent resident status - and I have *no* idea what this will do to my IRA's as far as taxable liability goes.
Alternatively, simply transferring the IRA's to Canadian equivalents may well incur penalty early withdrawal taxes on the traditional IRA - something I'm very keen to avoid if possible!
What are my options? And what are the options for my U.S. citizen husband, who is also going to become a Canadian permanent resident? We are both in our mid-30's.
Thank you so much - there seems to be no good advice out there on my particular situation!
XXXXXX
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david ingram replies:
I am really too busy to answer this for a non-client but will give you a couple of hints.
1. You should get your US citizenship BEFORE you come to Canada. It is quite legal to be a British, US and Canadian Citizen at the same time and it will make your life very much easier if you decide to go back to the USA, particularly, if you no longer have a US citizen husband.
2. A second alternative is to apply for a re-entry permit to keep your Green Card Alive while you are out of the country, Otherwise, your green card is generally considered to be dead a year after you come to Canada and even if you know someone who left and just went back and I know fifty people who did the same thing, I also know a hundred who had their dreams shattered when a Homeland Security (old INS) officer seized their green card(s) as they were trying to go back after a couple of years away.
3. Transferring to a Canadian IRA equivalent (RRSP) makes no sense. Canadian Financial Advisors are always telling their clients to diversify and get more of their investments into the USA. Leave it there until you want to take it out at 65 or so.
4. Losng your green card will NOT
If you want to follow up with a phone consultation, I would be glad to advise. I charge $350 an hour. However, your questions do not involve this tax season (US April 15th - Canada April 30th) and would ask that you wait until May if possible. On the other hand, if something needs an answer now, that is why I am here. You can phone (604) 980-0321 to set up a phone consultation.
And, in the meantime,
Answers to this and other similar questions can be obtained free on Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the internet at
www.600AM.com
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Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader & the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent financial, or real estate planner or advisor & appropriately qualified legal practitioner, tax or immigration specialist in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
2. Losing your green card will not affect your IRA's in any way
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