Keeping Accounts in Canada

Often times, relocating to Canada is followed shortly by a notice from your brokerage firm saying they can no longer trade in your account because you are non-resident of the US.  This is usually due to an over zealous compliance officer that doesn't know what to do with a Canadian address on a US account.  There are Securities and Exchange Commission rules that prevent US brokerage firms from dealing with non-residents of the US (It doesn't even matter if you are a US citizen).  

To get around this issue, some Canadian expatriates think they will "trick" the broker and the securities regulators by providing a US address of a family member, friend or post office box to the broker.  Besides breaching Canadian and US securities regulations and being subject to fines and penalties, there are several other problems with doing this:

	Your brokerage firm, if aware of your Canadian residency, could be subject to harsh fines and penalties for putting a US address on your account when residing in Canada.
	For ANY dividends and interest paid into your brokerage account, no withholding will be taken as required by the Canada/US Tax Treaty and you are then required to remit the correct withholding on a 1040NR to the IRS  This income must also be reported on your Canadian tax return resulting in potential double taxation.
	Lump-sum IRA withdrawals  will most likely have the incorrect withholding taken and you will be required to remit the correct withholding on a 1040NR tax return to the IRS.
	You will not receive your monthly investment statements in a timely fashion because you will be reliant on your family, friends to send them to you when it is convenient for them.
	Your confidentiality could be compromised if your confidential information ends up at a "trusted" friend or relatives house.

Another common area overlooked is what happens to accounts in the US if the account holder dies while resident in Canada?  Typically, the probate process has to be endured twice, once in Canada and once in the US .  See the Estate planning section of this website for more details. Finally, don't forget . . . your Roth IRA is fully taxable in Canada!