This article emphasizes the need to review financial planning and investment matters with a team well-versed in cross-border issues prior to any move, as a lack of proper planning can often result in higher taxation, poor estate planning and enhanced risk. It can be hard to identify an advisor who is qualified to offer financial advice on both sides of the border. The best strategy is to employ an advisory team that has the ability, platform and knowledge to manage assets in Canada and the U.S. under one cohesive strategy. A successful strategy requires in-depth knowledge of Canadian and U.S. tax systems and collaboration between cross-border professionals (financial advisors, CPAs, attorneys, etc.).
In part four of the series, John McCord examines how to adjust one’s risk management strategy when moving from the U.S. to Canada. Important considerations in this financial planning scenario include insurance and healthcare. The article discusses the mechanics, availability and restrictions of the Canadian healthcare system. It also looks at important questions to ask if one returns to Canada when holding U.S.-based life, disability and long-term care insurance policies.
In the third series installment, Cardinal Point’s John McCord looks at how the differing tax systems of the U.S. and Canada can lead to the risk of “double taxation” for expatriates when both countries tax the same income for the same tax year. The Canada U.S. tax treaty helps mitigate this risk as does the exchange of citizen and resident tax information between the two countries. Established in 1980, the treaty asserts that residency—not citizenship—is the most important factor. The article also discusses tax credits and tax-withholding guidelines set forth in the treaty.
In Part 2 of his series for the Canadian Expat Network, John McCord discusses deferred compensation arrangements and currency conversion. The article looks at how to mitigate higher tax rates and the risks of double taxation for U.S.-based deferred compensation plans that are payable to individuals who are moving to or returning to Canada. McCord also addresses different strategies for currency conversion and the management of currency risk.
This article by Cardinal Point’s John McCord for the Canadian Expat Network discusses some of the common misconceptions about a move from the United States to Canada. Readers are advised to start planning with their advisor as far in advance as possible, particularly in the areas of retirement planning, deferred compensation arrangements, currency conversion, the Canadian U.S. Tax Treaty, and insurance and estate planning. The article goes on to provide actionable steps to consider when making a cross-border transition, specifically in the areas of qualified retirement plans, Roth IRAs and U.S. retirement plans.