Q: If you are moving out of the country, how much of your investments can legally go with you?
—Mark Scanlon, Brighton, Ont.
A: Legally, you can take whatever investments you’d like. But there are a few tax issues to consider. Toronto chartered accountant John Mott says, “If you liquidate investments before you leave, you will of course be taxed on any capital gains that you trigger. If you leave while still holding investments with accrued capital gains, then you are treated for tax purposes as if you had sold the investments, making the gains taxable.”
This is called a “deemed disposition” but doesn’t apply to RRSPs. So you could leave the money inside your RRSP, and pay income tax on it down the line when you withdraw it. If you’re a non-resident when that happens the withdrawal will be subject to a flat 25% non-resident withholding tax, unless reduced by a tax treaty. If you decide to remove the RRSP investments before you become a non-resident, Mott says, then the withdrawal will be taxable on your final tax return before your date of departure. Consider hiring a professional to help you navigate your international move—both for your taxes and for packing up your priceless collection of Ming vases.
Bruce Sellery is the author of The Moolala Guide to Rockin’ Your RRSP. Do youhave your own personal finance question? Write to usat firstname.lastname@example.org