US Pre-Entry Tax Planning
Without proper planning, a Canadian moving to the US may encounter many adverse and often unanticipated tax consequences. In addition, without expert advice, the Canadian moving to the US may miss out on many tax savings opportunities unique to the cross border situation.
Tax residency is an often-overlooked factor for the cross border move. If pre-entry planning is not undertaken to plan for the most effective tax-exit date from Canada, unintended adverse tax impacts can be the result.
Also, it is possible to effectively be considered a tax resident concurrently in both jurisdictions. While the Canada-US Tax Treaty does mitigate most risks of double taxation, a lack of planning can lead to ultimate tax residency decision being taken out of your hands and into the hands of a series of tiebreaker rules. With this lack of control, the ability to effectively plan and optimize can be lost; resulting in added taxes, time and uncertainties.
Not only does proper pre-entry tax planning help avoid many of the costly pitfalls that are possible, it will also ensure the optimization of each individuals situation by utilizing all available tax planning opportunities. Altro LLP works with clients to explore tax-planning opportunities specific to their situation, such as strategies that enable individuals to utilize any accrued losses on non-registered investments twice. Further planning opportunities exist with registered investments that may allow for the withdrawal of these assets at a reduced tax rate, resulting in significant tax savings.
Our team is well versed in the pertinent factors that are relevant for Canadians moving to the US. Pre-entry tax planning is one of many important areas of a complete cross border plan necessary to ensure a smooth and efficient transfer of you and your wealth to your new home.