Keeping a US brokerage account after moving to Canada

My US broker restricted my account after I moved to Canada: is that a tax rule?

A broker's restriction notice is not a tax assessment, and by itself it does not change what you owe or file with the CRA or IRS. It may ask for updated tax documents. Ask the broker what caused the restriction, what transactions remain available, and whether there is a transfer or liquidation deadline.

US withholding depends on whether the payer holds a W-8BEN or W-9 that matches your status (Publication 515). Those forms record your tax status; they do not decide whether a broker will carry a Canadian resident's account.

Gather the restriction notice, current holdings, statements from the move date onward and your latest W-8BEN or W-9. Ask both institutions whether each security can move without being sold.

Do I give the broker a W-8BEN or a W-9?

Your US tax status determines the form. Living in Canada does not by itself make a US citizen or green card holder a foreign taxpayer.

Give W-8BEN to the broker, not the IRS (W-8BEN instructions); enter your residence information, required tax identification number and treaty country accurately. Generally, a W-8BEN stays valid through the last day of the third succeeding calendar year, counted from the year you sign it. Notify the payer within 30 days if changed circumstances make the form incorrect.

A non-citizen who spends enough days in the US can still be a US resident while living in Canada, under the substantial presence test; if so, tell the broker within 30 days and give it a W-9. A closer-connection claim on Form 8840 or the treaty tie-breaker can restore nonresident status, but each needs a US filing (Publication 519).

A joint account counts as foreign-owned only if every owner gives a W-8BEN; if any owner gives a W-9, it is treated as a US account (W-8BEN instructions).

Missing or incorrect documentation can lead to ordinary foreign-person withholding of 30% or backup withholding of 24%, depending on the payment (W-8BEN instructions; W-9 requester instructions).

What does the US take on a Canadian resident's dividends, interest and sales?

For a Canadian treaty resident who is not a US citizen or US tax resident, the US generally limits tax on dividends to the treaty rate and generally does not tax interest or ordinary share sales; the exceptions are below.

These rules come from treaty Articles X, XI and XIII. The table covers ordinary personal investments; real estate investment trusts, partnership units and fund distributions follow different rules. See US fund distributions on a Canadian return and US partnership units and withholding for Canadians.

A nonresident may need Form 1040-NR (the US return for nonresidents) if US tax was not fully withheld, a US trade or business is involved, or another filing condition applies; filing can also recover excess withholding (1040-NR instructions). Without US wages, it is due June 15 after the tax year ends. Whether you file depends on the income, the withholding and any US trade or business, not on holding the account. These are federal rules; for an old state's tax, see State income tax after moving to Canada.

What do I report in Canada each year on the account?

A Canadian resident reports taxable account income and sales on the Canadian return even when nothing is withdrawn. Foreign interest and dividends belong on line 12100 in Canadian dollars, before subtracting US tax; foreign dividends do not receive Canada's dividend tax credit (CRA: line 12100). Sales go on Schedule 3, calculated in Canadian dollars (see the steps below).

T1135 is a separate information return for Canadian residents whose specified foreign property, which includes shares of non-Canadian companies and money held outside Canada, cost more than C$100,000 in Canadian dollars at any time during the year, subject to exceptions. It is due with your return: April 30, or June 15 if you or your spouse carried on a business.

US shares in a non-registered account count even when a Canadian broker holds them, and so does cash held outside Canada, such as in a US account (Income Tax Act, section 233.3). RRSP and TFSA holdings are excluded. For property you already owned on arrival, the cost that counts is its fair market value on the day you became resident, not what you paid. You do not file a T1135 for the year you first become resident, but the account's income is still reported (CRA: T1135 questions). For what counts, detailed reporting rules and penalties, see Foreign property and affiliate reporting.

Quebec residents must also check the separate Foreign Property Return (form TP-1079.8.BE-V), which Revenu Québec requires for tax years ending after December 30, 2025 (Revenu Québec: foreign property reporting).

US tax withheld at or below the treaty rate may support a Canadian foreign tax credit, subject to limits such as the 15% cap on foreign tax for property income (CRA: foreign tax credit; CRA folio, paragraph 1.22). Tax withheld above the treaty rate is generally not credited; the excess is sought from the US (CRA folio, paragraph 1.35). For the forms and limits, see Foreign income on a Canadian return; for a refund claim, see US tax withheld from a Canadian. Quebec residents claim Quebec's credit through Revenu Québec, not on the federal Form T2036 (CRA: foreign tax credit).

I am a US citizen or green card holder: what changes?

US citizens and resident aliens generally remain subject to US tax on worldwide income while living in Canada. Their investment income and sales may belong on Form 1040 as well as the Canadian return (IRS: taxpayers abroad).

A green card holder generally remains a US tax resident unless that status ends under the applicable rules. A dual-resident taxpayer claiming treaty benefits must file Form 1040-NR with Form 8833 attached, and in some cases the claim can trigger expatriation tax under section 877A for a long-term resident (Publication 519; see Exit tax when giving up a green card). A change of address alone does not turn a W-9 into a W-8BEN (W-8BEN instructions).

A brokerage account located in the US is not a foreign account for FBAR (the US report of foreign bank and financial accounts) purposes. An ordinary brokerage account maintained by a US financial institution is also excluded from Form 8938. Moving the account to a Canadian institution can bring it within both reporting systems, subject to their separate requirements (IRS: FBAR; Form 8938 instructions).

For citizenship-based tax and Canadian-credit mismatches, see Why you still owe the IRS after paying Canadian tax.

Can I transfer the US brokerage account to Canada without selling?

A transfer in kind moves the shares themselves to the new broker; nothing is sold. Between the same owner's non-registered accounts, it generally does not create a taxable sale. Whether both brokers can execute it must be confirmed with them.

Canada's definition of disposition leaves out a transfer after which there is no change in beneficial ownership, apart from listed trust transfers (Income Tax Act, subsection 248(1)). A transfer in kind between your own non-registered accounts is generally within that wording, but neither the Act nor the CRA pages cited here mention brokerage transfers by name, so the result depends on the facts. For US tax, gain or loss is realized on conversion into cash or exchange for materially different property (26 CFR 1.1001-1(a)); a transfer with neither is not described there. A sale during the process is a separate transaction.

Preserve your existing Canadian cost records; a transfer in kind generally does not reset them.

Moving shares into a TFSA is not a plain transfer: CRA treats an in-kind contribution as a sale at fair market value, so a gain is reported and a loss cannot be claimed (CRA: before you contribute to a TFSA). Contributing to another registered plan, adding another owner or changing the investment also needs separate review.

Should I sell before the broker makes me, and what if it sells for me?

A forced sale still requires the normal tax calculation. Before approving a sale, compare the expected Canadian gain or loss and any US tax with the available transfer route and the broker's deadline.

For ordinary portfolio securities owned on arrival, Canadian cost generally starts at fair market value when Canadian residency begins, adjusted for later transactions (Income Tax Act, section 128.1(1)). A returning former Canadian resident can elect in writing under subsection 128.1(6), by the filing-due date for the return year, to adjust that cost. For the residency date, move-year returns and arrival costs across the portfolio, see Moving from the US to Canada.

Selling at a loss and buying identical securities around the transfer can also defer Canada's loss deduction: the superficial-loss rule considers purchases within 30 days before or after the sale and ownership at the end of that period, including affiliated persons (CRA: capital gains). A US citizen or green card holder also keeps the original purchase price as US cost (IRS: capital gains and losses) and faces the US wash-sale rule (Publication 550); see Why your investment gain differs on US and Canadian returns. Obtain trade confirmations for any liquidation; moving the proceeds afterward does not erase the sale.

Which year-end documents will I get, and how do I use them in Canada?

Which US forms you get depends on your US status, the broker and the transactions; a Canadian broker may send T5 and T5008 slips. Reconcile every form with the statements; a US reporting label or cost figure does not determine the Canadian treatment.

Use the records in this order:

1. Reconcile income and withheld tax to the statements, including payments credited or reinvested in the account.
2. Convert foreign interest and dividends to Canadian dollars, generally at the rate when they arise; averages are acceptable only in appropriate circumstances (CRA: line 12100).
3. Calculate Canadian proceeds, adjusted cost base (your Canadian cost, adjusted for later changes) and selling expenses, each converted at the rate on its own transaction date, and report them on Schedule 3; converting a broker's US-dollar gain at one rate can produce the wrong result (CRA: capital gains).

After a transfer, any T5008 box 20 amount may still need adjustment to reflect your actual Canadian adjusted cost base (CRA: T5008). A missing Canadian slip does not remove income from the Canadian return (CRA: line 12100).

I never reported the US account in Canada: where do I start?

Start by separating missing income from missing T1135 filings. Reporting one does not satisfy the other, and the first-residency-year T1135 exemption may change which years need correction (CRA: T1135 questions).

Gather prior Canadian returns, T1135 confirmations, statements, US tax forms, arrival valuations and any CRA notices; use Missed foreign property reports for US accounts for the correction route and penalty review. For income left off a return, see Unreported income or foreign property: coming forward.

Example

Illustrative only. Assume a Canadian resident is not a US taxpayer, qualifies for treaty benefits and holds ordinary US corporation shares outside a registered plan. All figures are in Canadian dollars after the required currency conversions.

The shares' Canadian arrival cost was C$40,000. There are no later purchases or cost adjustments. A broker sells them for C$50,000 with no selling expenses. The Canadian capital gain is C$10,000 before applying the inclusion rules and any losses; a broker-directed sale still counts.

During the year, the shares pay a gross dividend of C$1,000 and US withholding equals C$150. The Canadian return reports C$1,000 of foreign dividend income, with C$150 considered separately for the foreign tax credit, subject to its limits. Reporting only the C$850 cash received understates income.

If the same shares instead move between the owner's non-registered accounts without a sale or ownership change, the C$40,000 Canadian cost record generally continues.

Different for you?

• You are still sorting out the move date or arrival values: see Moving from the US to Canada.
• You are a US citizen or green card holder: see Americans living in Canada; treaty positions and sales with different Canadian and US costs can call for a cross-border tax review.
• The account is a 401(k), IRA or Roth IRA: see US retirement accounts in Canada.
• You need T1135 categories, exclusions or penalties: see Foreign property and affiliate reporting.
• You are a US taxpayer moving the account to Canada: check Foreign account reporting for FBAR and Form 8938 requirements.
• You plan to buy Canadian ETFs or mutual funds as a US taxpayer: Form 8621 may change the filing burden; see Funds bought outside the US.
• You hold US shares and are concerned about US estate tax: see How should a Canadian own US property?.
• The account belongs to your corporation: a corporation gives Form W-8BEN-E, not W-8BEN; see Filling out Form W-8BEN-E for a Canadian corporation.
• A liquidation deadline, joint ownership change or several unreported years complicate the decision: bring the notice, statements, tax forms and both cost histories to a cross-border tax review.