CANADIANS Moving to the U.S.

The American Dream is calling. You’ve landed a job in Seattle, accepted a transfer to New York, or decided to retire somewhere warm. Moving to the United States is an exciting new chapter.

It’s also one of the most financially consequential decisions you’ll ever make.

The Canadian government wants to settle accounts before you leave. Your investment structure needs to change. Your tax situation transforms overnight. And decisions made in the months around your move will affect your finances for decades.

We help Canadians navigate this transition—planning before the move, executing during it, and managing the aftermath.

What Happens When You Leave Canada

Departure Tax

When you cease to be a Canadian resident, Canada imposes a “deemed disposition” on most of your capital property. You’re treated as if you sold everything the day before you left—and the capital gains tax is due immediately.

Subject to departure tax:

• Publicly traded securities
• Private company shares
• Investment real estate (not your principal residence)
• Partnership interests

Not subject to departure tax:

• Your principal residence (principal residence exemption)
• Canadian real property (taxed later when actually sold)
• RRSPs, RRIFs, and other registered accounts (different rules apply)

With proper planning—starting 12-24 months before your move—we can help minimize this tax hit.

Your RRSP

Good news: You can keep your RRSP after moving to the U.S. You don’t have to collapse it.

The U.S. recognizes RRSP tax deferral under the Canada-U.S. Tax Treaty. Your RRSP continues to grow tax-deferred while you’re a U.S. resident.

When you eventually withdraw:

• Canada withholds tax (15% on periodic payments under the treaty)
• The U.S. taxes the withdrawal as ordinary income
• Foreign tax credits prevent double taxation

Your TFSA

Bad news: Your TFSA doesn’t work in the U.S.

While the U.S. won’t tax your TFSA directly, once you’re a non-resident, you can’t contribute, and the account loses much of its benefit. Most advisors recommend collapsing your TFSA before or shortly after departure.

Your Canadian Investments

As a U.S. tax resident, you’ll face PFIC rules on Canadian mutual funds and most Canadian ETFs. These need to be restructured before or immediately after your move.

What We Help With

Pre-Move Planning

• Departure tax estimation and minimization strategies
• Investment restructuring to avoid PFIC issues
• RRSP strategy (keep it, convert to RRIF later, manage withdrawals)
• TFSA collapse and reinvestment
• Timing optimization

During Your Move

• Account transfers to cross-border-friendly institutions
• Documentation of asset values for U.S. cost basis
• Coordination with cross-border accountants

After Your Move

• Ongoing management of Canadian accounts from the U.S.
• U.S. account setup and management
• Retirement income coordination (CPP, RRSP, U.S. accounts)
• Estate planning updates for your new country

Common Mistakes We Help You Avoid

Ignoring departure tax until it’s too late — By then, your options are limited.

Keeping TFSA open — It’s no longer beneficial and may cause U.S. reporting headaches.

Holding Canadian mutual funds as a U.S. resident — PFIC taxation is devastating.

Using separate advisors in each country — They don’t coordinate, and things fall through the cracks.

Not understanding state tax — California vs. Texas is a massive difference. Factor it into your decision.

Why Plan Ahead

The year you move is the most complex tax year you’ll ever have. You’re filing in both countries, dealing with departure tax, establishing U.S. residency, and making decisions with long-term consequences.

Starting 12-24 months before your move gives you time to:

• Harvest capital losses to offset departure tax gains
• Complete Roth conversions while still U.S.-connected (if applicable)
• Restructure investments properly
• Find the right advisors and professionals

Don’t wait until the moving truck is scheduled.