Hi All, I recently moved to Canada and I’m looking for a trading platform to transfer my stocks from Robinhood. I’ve done some research and understand that most Canadian brokers purchase US stocks but charge currency exchange fees. Since I hold US stocks and a USD account, any recommendations on trading platforms in Canada that take USD directly with investing? Many thanks!
Questrade allows you to hold both USD and CAD funds in your brokerage accounts.
You should also be able to transfer stocks and some mutual funds in kind from your US brokerage to the Canadian brokerage; thereby avoiding triggering a taxable event.
That’s extremely helpful! Not only can a transfer avoid tax complications, but also avoid trade commissions charged by Questrade which would occur if I sold my holdings with Robinhood first and later bought with Questrade?
That is correct, however Robinhood will charge you an account transfer fees. Most brokers will refund you the fees. I’m not sure how it works for cross border firms.
For example when I transferred my account from Robinhood into Schwab, Schwab reimbursed me the fee that Robinhood had charged. Canadian brokers offer the same terms as long as the portfolio is of a certain size typically a few thousand dollars.
This might be an offbeat question but has anyone traded from Robinhood after moving to Canada assuming ofcourse that you can because of a valid SSN and US bank account (which is required to create the account in the first place)?
Hi Can you suggest which is the best broker in Canada to transfer from Robinhood? How can one maintain USD account after moving to Canada? So transferring stock do not trigger any tax event ? please elaborate. Thanks for your answers.
Hi Did you get any response for your question. curious to know ?
I don’t have multiple brokerage accounts, so I can’t say what the best broker in Canada is.
I’ve had a reasonably goof experience with Questrade, so perhaps you can look at them. Most Canadian Brokerages are able to transfer assets in kind, this kind of a transfer doesn’t trigger a taxable event.
To elaborate, you need to understand what a tax event is. This depends on the type of security, it’s different with Options than it is with Mutual/Index Funds or Stocks and Bonds. Typically under both Canadian and US tax systems only certain events trigger a tax event. The most common of these is the disposition of the asset in a sale at which point depending on your cost basis you will either have accrued some time of Capital Gains or Capital Loss. If such an event doesn’t happen, then there is nothing to tax really, the other most common event is the payment of dividends which is treated as income not Capitals Gain.
So lets say that you bought 10 google stocks for $500 in 2015 (pricing and dates are hypothetical) and sold them in 2019 then in the years of 2015, 2016, 2017, 2018 you will not pay tax. The tax will be due on your returns of 2019 which you will file in 2020.
Another way to look at this is that if you go back 15-20 years when people didn’t trade stocks online but were issued physical stock certificates, when coming from the US to Canada you would just bring your stock certificates along with you. There is no tax that would be due on this either in the US or Canada. When you later sell these stocks, tax will be due in Canada and your cost basis will be the price at which these traded on the day that you brought them into Canada.
This is really a question that you should direct to Robinhood Customer Service or for that matter any other broker that you have an account with.
The answer in general can be found in the terms of service.
Section 8 - Important Information Needed to Open a New Account. To help the government better detect the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify, and record information that identifies each person who opens an account. Therefore, I understand that when I open My Account Robinhood will ask for My name, address, date of birth and other identifying information. Robinhood may also ask copies of My driver's license, passport or other identifying documents. I understand that Robinhood may take steps to verify the accuracy of the information I provide to Robinhood in My Account application or otherwise, and that Robinhood may restrict My access to My Account pending such verification. I will provide prompt notification to Robinhood of any changes in the information including My name, address, e-mail address and telephone number. I further understand that if I attempt to access My Account from a jurisdiction subject to certain U.S. sanctions or I am ordinarily resident in such a jurisdiction, or if you reasonably believe that I am attempting such access or have become a resident in such a jurisdiction, you may restrict My Account, and any pending orders may be cancelled. If this happens, I understand that I should contact firstname.lastname@example.org, and that I may be asked to provide supplemental information as part of this process. I further understand that I must close My Account before establishing residency in any jurisdiction subject to U.S. sanctions.
Basically this says that you must notify Robinhood that your address has changed promptly. Canada isn’t subject to US sanctions, so you’re fine on that front. Once you notify them that you are no longer a US resident, they will tell you if they want to continue to do business with you or not. If they will continue to do business with you, then you’re free to trade to your hearts content. If not, you may be able to transfer your account in kind to a Canadian or US Broker who will do business with you or to liquidate funds and have them write you a check.
I changed my address on Vanguard yesterday and they promptly notified that I cant buy securities any more
Have you been able to file W8-BEN with Vanguard? They have been very difficult in accepting a W8-BEN and have been requesting to file a I-407 - which I do not think I should.