There are some exceptions to that rule of thumb – as an illustration, if the funding is held inside a Canadian registered account. But when a cross-border consumer is seeking to make investments non-registered monies, Ahmed says it’s usually not advisable to place it in Canadian structured merchandise, which might be deemed as passive overseas funding firms (PFICs) for U.S. tax functions.
Whereas Ahmed stresses that choices are made on a case-by-case foundation, he says the usual recommendation within the overwhelming majority of circumstances is to keep away from problems the place doable. He and his crew attempt to adhere to that guiding philosophy, although there are conditions the place there’s a powerful cause to do in any other case.
“Usually, it’s a dialog between your monetary skilled, your tax skilled, and your self to see whether or not or not the technique is value placing cash into regardless of the tax ramifications,” he says. “What I advocate for everyone is you by no means need tax to drive the bus in your decision-making, but it surely ought to positively sit shotgun.”
Just like the overwhelming majority of cross-border funding advisors, Ahmed retains a lookout for merchandise and methods that could possibly be an excellent match for his purchasers’ wants. He makes use of Canada-listed alternate options and U.S.-listed alternate options as applicable, however isn’t conscious of any providing that addresses the particular reporting nuances related to cross-border investments.
“I have never essentially seen folks feeling like they’re left behind simply because they don’t seem to be taking part in a Canadian technique,” Ahmed says. “I’ve discovered there are nonetheless sufficient choices listed within the US to serve cross-border purchasers.”