Cross-Border Implications of Holding a 529 Plan

Many Canadians move for career opportunities to the U.S., work and raise families, and then plan to relocate back to Canada.

How 529 Plans are Treated in the U.S.
A qualified tuition and educational savings plan for children (a 529 plan) is exempt from taxation in the U.S., in most cases, even when a child attends a Canadian university.

How Canada views 529 Plans
If you are a Canadian who is considering such a plan, and especially for anyone with an investment in a 529 plan who is moving back to Canada, clear expert advice from a cross-border financial specialist is a very prudent step, so we’re glad you will be downloading this ebook.

The Bottom Line
Canadian families returning to Canada from the US must consider significant tax implications associated with any existing 529 Plans, including whether a Canadian higher education institution is eligible under the Plan. Also, there is the likelihood of new Canadian tax liability as well as the possibility the 529 may be deemed a resident trust. Transferring ownership of the 529 may avoid triggering new taxes.

About Cardinal Point Wealth Management

We specialize in assisting affluent Canadian expats, Canada-U.S. dual citizens, green card and visal holders, and snowbirds with their cross-border investment, tax, estate retirement and financial planning needs.

• Fiduciary Standard: Our professionals operate under the highest standard of care in the financial services industry.
  

• Independence: Clients benefit from access to a non-proprietary, conflict-free platform.
  

• Transparency: Our fee-only compensation structure is openly disclosed.
  

• Collaborative Approach: Our team of multidisciplinary professionals includes Certified Financial Planners® (CFP® Canada & US), Canadian and U.S. Chartered Accountants (CPA), Chartered Financial Analysts (CFA), and tax attorneys (Esq).
  

• Investment Expertise: We subscribe to a disciplined, tax-efficient and cost-effective investment approach.
  

• Holistic Financial Planning: Clients are profiled to learn about their values, goals, income, balance sheet, investments, insurance, and employee benefits, as well as all retirement, tax, education, and estate planning requirements.
  

• Integrated Cross-Border Financial Planning: We have a suite of personalized Canada-U.S. cross-border investment, financial and tax planning solutions.

• Client Service and Professionalism: Our practitioners are committed to service excellence.