USD Exchange Rates:

CAD +0.03%
EUR –0.11%
JPY –0.13% Per 1,000
GBP +0.16%
CHF –0.38%

Currency exchange rates in USD on December 24, 2020

Locked-In Retirement Accounts

Once you decide to move your investments to the US, you come across the thorny issue of how to collapse your Locked-in Retirement Accounts (LIRA).  LIRAs are exactly that, “locked-in,” and when you tell your broker you want to de-register the funds and withdraw everything to move to the US, the standard answer is “you can’t”.  This means you have to wait until the appropriate retirement age, convert your LIRA to a LIF and begin taking out the prescribed distributions. There are several problems as outlined in the Keeping Accounts in Canada section that you should review.

The first item you must contend with is determining whether your pension plan falls under the federal or provincial rules.  If your plan falls under the federal rules (federally regulated industries like telecommunications, television, airlines or railroads), you have to be out of the country for at least two calendar years before you can withdraw it, and it must come from the pension plan, not your LIRA.  If your Locked-in retirement accounts fall under provincial rules, you may or may not be able to withdraw it.  Currently, the only four provinces that allow you to withdraw your LIRA are BC, Alberta, Manitoba and Quebec.  There is currently a sweep of legislation brewing across Canada that is expected to move this nuisance for those departing Canada.

The second issue you must contend with is determining what process needs to be followed to de-register your Locked-in retirement accounts.  Each Province has their own rules, but the starting point is filing an NR73 form – Determination of Residency Status, and getting it approved by Canada Customs and Revenue Agency.  This is a tricky form and you need to proceed with caution when filling it out because if done incorrectly, the Revenue Agency could still deem you a resident of Canada and subject you to Canadian taxes.