Withdrawing RRSP as a non-resident - international non-resident cross border income tax help estate family trust assistance expe

Hello, Mr. Ingram,

I was planning to withdraw my RRSP because it is not making that much money
in Canada.  I have other investment ideas and I can use the money here in
the US.  As per you info, the tax withheld is 25%.  TD will be charging me
30% as the RRSP value is over $15,000.  TD is also saying that I have to
claim the funds withdrawn as income for 2007.  I thought I do not need to
file a Canadian Income Tax.  I also thought that I only need to declare in
my US tax return the meager RRSP earning from the date that I left Canada
(May 2003) to the time that I withdraw the RRSP.

Your thoughts, please.

Thank you.

>From: [email protected]
 >Subject: Re: Withdrawing RRSP
>Date: Sun, 18 Feb 2007 09:30:59 -0500
 >I appreciate your interest in redeeming from your RSP account. Thank you
>for taking the time to write.
>There is some important information that you should be aware of when
>considering a redemption from your RSP. If your RSP has been open for less
>than 6 months, the fee is $100.00 per withdrawal. For RRSPs opened more
>than 6 months, the fee is $50.00 per withdrawal. This is not related to
>the funds that you hold, but is only based on the age of the RSP account.
>Depending on how much you withdraw from your RSP, the withholding tax will
>vary. The Withholding Tax for all Provinces except Quebec is as follows:
>Withholding Tax Rate    Gross Withdrawal
>10%                             Up to $5,000
>20%                     Between $5,000 and $15,000
>30%                     $15,000.01 and over
>We would recommend that you exhaust all other avenues of finance prior to
>making a decision to redeem from your RSP, as your RSP is designed for
>retirement purposes and the fees and taxes may make it less attractive to
>withdrawal. You'll also have to claim the funds withdrawn as income for
>the current year.
>Please note as well that all RSP redemptions must be claimed on your
>income tax as part of your income.
>If you do need to complete a redemption, you can do so by calling EasyLine
>at 1-866-222-3456, available 24 hours everyday, and request the redemption
>through a representative. They would be happy to help.
>Concerning your tax related questions and statement, I'd recommend that
>you also contact the Canada Revenue Agency for further assistance:
>I hope this direction is helpful. Thank you once again for writing.
>Best regards,
>Internet Correspondence Representative
>TD Canada Trust 1-866-222-3456
>Email: [email protected]
>TDD (Telephone Device for the Deaf) 1-800-361-1180 (toll free)
>This email is directed to, and intended for the exclusive use of, the
>addressee indicated above. TD Canada Trust endeavours to provide accurate
>and up-to-date information relating to its products and services. However,
>please note that rates, fees and information are subject to change.
david ingram replies:

As a non-resident of Canada, the withholding on your RRSP is 25% of the gross withdrawal whether you take out $5,000 or $500,000.  The Canada Trust directive you received is in error about the withholding rate but I expect it is a form letter and  does not reflect your non-resident status.

The Canada Trust directive is also in error about the necessity to file a Canadian return  for the same reason.  When the 25% is withheld, Canada Trust should issue a T4RSP-NR showing the gross withdrawal and the 25% withholding.

This is the end of your tax filing responsibility to Canada unless the CRA specifically asked you for a world wide income statement which they can do. If they were to make such a request, you would report your world wide income and deduct it all on Line 256 of the T1 under Article IV of the US/Canada Income Tax Convention (Treaty).

For the US, the amount that is taxable on your US 1040 and your New Jersey or New York tax return is the difference between the RRSP's value on the day you left Canada and the day you cash it in.

Against that profit, you will be able to claim the pro-rata basis of the 25% tax paid to Canada as a foreign tax credit on form 1116.

David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325

Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office)

email to [email protected] <
mailto:[email protected]>
www.centa.com <
http://www.centa.com/>  www.david-ingram.com <http://www.david-ingram.com/>

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 and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com <
http://www.centa.com> . If you forward this message, this disclaimer must be included."

Be ALERT,  the world needs more "lerts"

international non-resident cross border income tax help estate family trust assistance expert preparation & immigration consultant david ingram, income trusts experts on rentals mutual funds RRSP RESP IRA 401(K) & divorce preparer preparers consultants

Alaska,  Alabama,  Arkansas,  Arizona,
California,  Colorado, Connecticut, 
Delaware, District of Columbia,  Florida,
Garland, Georgia,  Hawaii,  Idaho,  Illinois,
Indiana,  Iowa,  Kansas,  Kentucky,
Louisiana,  Maine,  Maryland, 
Massachusetts, Michigan, Minnesota, 
Mississippi,  Missouri,  Montana,  Nebraska, 
Nevada, New Hampshire,  New Jersey,
New Mexico, New York, North Carolina, 
North Dakota,  Ohio,  Oklahoma,  Oregon.
Pennsylvania,  Rhode Island,  Rockwall,
South Carolina, South Dakota, Tennessee, 
Texas,  Utah, Vermont,  Virginia,
West Virginia, Wisconsin, Wyoming,
British Columbia, Alberta, Saskatchewan,
Manitoba, Ontario, Quebec City,
New Brunswick, Prince Edward Island,
Nova Scotia, Newfoundland, Yukon and
Northwest and Nunavit Territories, 
Mount Vernon, Eumenclaw, Coos Bay
and Dallas Houston Rockwall Garland
Texas  Taxman and Tax Guru  and wizzard 
wizard - consultant - expert - advisor -advisors consultants - gurus - Paris Prague Moscow Berlin
Lima Rio de Janeiro, Santaigo Zimbabwe

 David Ingram expert income tax help and preparation of US Canada Mexico non-resident and cross border returns with rental dividend wages self-employed and royalty foreign tax credits family estate trust trusts
This from "ask an income trusts tax and immigration expert" from www.centa.com <
http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US

David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.

New York, Boston, Sacramento, Minneapolis, Salem, Wheeling, Philadelphia,
Pittsburgh, Atlanta, Pensacola, Miami, St Petersburg, Naples, Fort Myers,
Cape Coral, Orlando, Atlanta, Arlington, Washington, Hudson, Green Bay,
Minot, Portland, Seattle, St John, St John's, Fredericton, Quebec, Moncton,
Truro, Atlanta, Charleston, San Francisco, Los Angeles, San Diego,
Sacramento, Taos, Grand Canyon, Reno, Las Vegas, Phoenix, Sun City, Tulsa,
Monteray, Carmel, Morgantown, Bemidji, Sandpointe, Pocatello, Bellingham,
Custer, Grand Forks, Lead, Rapid City, Mitchell, Kansas City, Lawrence,
Houston, Albany, Framingham, Cambridge, London, Paris, Prince George, Prince
Rupert, Whitehorse, Anchorage, Fairbanks, Frankfurt, The Hague, Lisbon,
Madrid, Atlanta, Myrtle Beach, Key West, Cape Coral, Fort Meyers,   Berlin, Hamburg
Warsaw, Auckland, Wellington, Honolulu, Maui, Kuwait, Molokai, Beijing,
Shanghai, Tokyo, Manilla, Kent, Winnipeg, Saskatoon, Regina, Red Deer, Olds,
Medicine Hat, Lethbridge, Moose Jaw, Brandon, Portage La Prairie, Davidson,
Craik, Edmonton, Calgary, Victoria, Vancouver, Burnaby, Surrey, Edinburgh,
Dublin, Belfast, Glasgow, Copenhagen, Oslo, Munich, Sydney, Nanaimo,
Brisbane, Melbourne, Darwin, Perth, Athens, Rome, Berne, Zurich, Kyoto,
Nanking, Rio De Janeiro, Brasilia, Colombo, Buenos Aries, Squamish,
Churchill, Lima, Santiago, Abbotsford, Cologne, Yorkshire, Hope, Penticton,
Kelowna, Vernon, Fort MacLeod, Deer Lodge, Springfield, St Louis, Centralia,
Bradford, Stratford on Avon, Niagara Falls, Atlin, Fort Nelson, Fort St
James, Red Deer, Drumheller, Fortune, Red Bank, Marystown, Cape Spears,
Truro, Charlottetown, Summerside, Niagara Falls, income trust


Trackback URL for this entry: http://www.centa.com/trackback.php/UsCaWeekofMon20070219003169.html

No trackback comments for this entry.