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Hi everyone,

I currently have some savings in my Swiss bank account that I`d like to invest with a robo-advisor (like wealthsimple). I figured that this would be a good investing option for now, because I: a.) will get a better return on my investment with wealthsimple than with my bank, and b.) have zero investing knowledge, and hence wouldn`t want to make any uninformed moves by my own.

I`m currently living in Ontario and it`s unsure whether I`ll stay here and apply for permanent residency or go back to Switzerland.

My question:
If I moved back to Switzerland and closed my Wealthsimple account, would I have to pay capital gain tax on that money in Ontario?

I`d appreciate any answer.
Thanks!
 

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In all likelihood, yes. See https://www.canada.ca/en/revenue-ag...a-non-residents/leaving-canada-emigrants.html. And https://www.canada.ca/en/revenue-ag...-residents/leaving-canada-emigrants.html#dptx

It's under "Departure Tax". There is a "deemed disposition" of your investments, and you have to pay capital gains based on the FMV (Fair Market Value) at the date of departure.

(Of course if you "closed your WealthSimple Account", there would be an actual disposition, and the capital gain would be based on that disposition. Unless you are somehow allowed to transfer the assets in kind to some foreign account. Either way, you can't escape the tax man.)
 

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P.S. By the way, it is stupid this software does not allow the deletion of posts before there are any follow on posts, i.e. a Delete icon.
 

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^^^^^

YMMV ... this is all good info for a taxable account. Registered accounts are a different story.

If it is a TFSA account, then there will be no Canadian taxes. Note that one can keep a TFSA despite changing from a Canadian tax resident to a non-resident (NR) ... you won't have more TFSA contribution room granted and you can't add more $$$ to the TFSA while you are a NR.

In a similar fashion, the RRSP can also be kept but withdrawals after moving will be taxed as a non-resident.


I am not sure how Switzerland deals with registered accounts so if you have them when you decide to move back, make sure to investigate what makes sense to do with them. As an example, a Canadian moving to the US is recommended to get rid of their TFSA as the IRS taxes all of it, after becoming a US tax resident. For the RRSP when moving to the US, the advice is to sell then rebuy all investments within the RRSP as only the cost is tax free (i.e. have $200K in the RRSP at a cost of $125K ... IRS will tax $75K but if one sold/rebought everything then the cost may be $198K, with the US taxing $2K plus future growth).

http://blog.modernadvisor.ca/leaving-canada-rrsp-tfsa-non-resident/


I noticed the title was
Where do file taxes on capital gains made in Canada? –> Swiss resident
If the WealthSimple account is a taxable account then depending on what the portfolio ETFs pays - there may be a mix of income that you will have to report and possibly pay Canadian tax on each year as part of the yearly Canadian tax return.

For example, if XIU from iShares is one of the ETFs - last year in 2016 it paid eligible dividends (taxed yearly) and return of capital (reduces cost so that future capital gain is larger) while the year before it paid eligible dividends and capital gains (both are taxed yearly).


If it is a small amount that can fit ... it might keep things simple to fund registered accounts while learning what is required in a taxable account. I suspect the TFSA gives the most flexibility - though if your income is high enough so that a tax refund is generated, using the tax refund to fill the TFSA may put you farther ahead.


Cheers
 
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