Moving between countries presents unique tax-planning opportunities otherwise not available to most taxpayers. It may also present a higher-level of complexity than your existing advisor is able to navigate. Although Canadian and U.S. tax law have many similarities, it is important for the individual considering a move to Canada or the U.S. to understand how they are different since that is where both the problems and opportunities most often arise.<\/p>\n\n\n\n
An effective tax plan for one country may attract tax issues and create unwanted tax results when the individual emigrates and becomes a resident of another country. For example, where a Canadian resident individual who owns a Canadian corporation or is a beneficiary of a Canadian trust moves to the U.S., the individual may find himself subject to U.S. anti-deferral rules that may have an adverse tax result. Conversely, U.S. persons moving to Canada may hold assets in entities that do not produce a tax-efficient result in Canada or hold investments that have preferential tax treatment in the U.S. but not in Canada. In addition, an individual\u2019s inadvertent failure to comply with the disclosure requirements that exist in both countries may lead to substantial penalties if the individual is unaware of his or her tax filing obligations.<\/p>\n\n\n\n
Ideally, planning for a move between Canada and the U.S. would start the year prior to the move to make any required pre-move changes without affecting tax obligations in the other country. The planning starts with a consultation to discuss the relevant facts associated with the move, including the individual\u2019s assets, liabilities and earnings both before and after the move. Andersen will review these facts and apply the relevant tax laws and strategies related to them. At the end of the consultation, the strategies to pursue will be identified and a plan discussed on how to move forward. Even where the planning starts after the move, there may be an opportunity to create a better tax result.<\/p>\n