Author Topic: Transferring Large us $$ to Canada  (Read 4899 times)

coco1106

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Transferring Large us $$ to Canada
« on: April 11, 2019, 01:53:19 PM »

  When we sell our home in USA we plan on relocating to Ontario Canada,.       we are dual citizens usa/cdn
We plan on opening a Canadian bank account maybe 2 months before we move, I have already reached out to TD in ontario, no problems opening a acct for cross boarder. 

  Hoping we get $300k us$ which will be deposited in our USA bank acct..............sorry if this is a stupid basic question but .....

How is that money transferred to Canada , do we transfer before we leave USA, do we transfer when we find our new home in Canada ( which will be about 3 months after we move, we plan on living with family for a while, that way we can buy our home after all the craziness of moving is done...household goods will be in storage)

Will TD CDN  ask were all this money come from ??? of course I will have all the paperwork from the sale of the house in USA...ALSO I think we will transferring to TDAmeritrade for retirement accts  , and for cash accounts, so we will deposit  the funds form the sale of our home in USA to TDameritrade then transfer to TD in Canada .

So it will be TDameritrade transferring to  TD in canada I am not sure if this makes any difference ???

Thank you for any input on transferring large us $$ to canada.


K-ice

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Re: Transferring Large us $$ to Canada
« Reply #1 on: April 11, 2019, 08:00:20 PM »
Sorry I canít answer all your questions.

I personally wouldnít convert it all at once. As a Canadian I can hold an account with USD.

If you do want to convert large amounts check out Norbertís Gambit.

https://canadiancouchpotato.com/2013/12/03/norberts-gambit-the-complete-guide/

RBC used to have a great pdf explaining it. Iíll try to find that one too.
« Last Edit: April 11, 2019, 08:05:36 PM by K-ice »

K-ice

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Re: Transferring Large us $$ to Canada
« Reply #2 on: April 11, 2019, 08:04:57 PM »
Iíll add that I have deposited a few US cheque into my USD savings account. It is no big deal but often takes 5 days to clear.  I have then used that cash any time I travel to the US.

I didnít find the pdf I was looking for but this link is also helpful.

https://www.pwlcapital.com/norberts-gambit-rbc-direct-investing/

If you are at TD bank here is a great video.

https://youtu.be/BwUyQm60F_k

« Last Edit: April 11, 2019, 08:08:07 PM by K-ice »

coco1106

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Re: Transferring Large us $$ to Canada
« Reply #3 on: April 12, 2019, 07:54:18 AM »

   thanks for the information,
  TD said they could help us, I am certain people do this all the time, its all new to us so sometimes its a bit over whelming, I was just concerned since we will have a large us$$ when we moved and we want to pay for our new home in Canada with cash so we will not have a mortgage.

nereo

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Re: Transferring Large us $$ to Canada
« Reply #4 on: April 12, 2019, 03:05:02 PM »
Absolutely use Norbert's Gambit for transfers of several hundred thousand$.  If you just use TD's cross- border banking they will take a good chunk from their basis points off the spot US:CAD conversion.  I think it's around 2% of the total, so you're talking about losing $6k in hidden fees.  In contrast, Norbert's Gambit costs less than $50 in buy/sell orders.  TD will even help set this up for you, once you find the right person to talk to (call and ask, they've got brokers who will be familiar with this).

Goldielocks

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Re: Transferring Large us $$ to Canada
« Reply #5 on: April 16, 2019, 09:29:35 PM »
Absolutely use Norbert's Gambit for transfers of several hundred thousand$.  If you just use TD's cross- border banking they will take a good chunk from their basis points off the spot US:CAD conversion.  I think it's around 2% of the total, so you're talking about losing $6k in hidden fees.  In contrast, Norbert's Gambit costs less than $50 in buy/sell orders.  TD will even help set this up for you, once you find the right person to talk to (call and ask, they've got brokers who will be familiar with this).

This is the best way.  But not everyone wants to set up the accounts...  the money you save is worth it, though.

Second best is using a Forex trading account/company.  (We used one now bought by Western Union, they charged us 70% lower fees than the bank)
Third is to use a small cash based foreign exchange company (if you exchange in the tens of thousands or less).  There are also money exchange co ops for snow birds.   The large payday loan place near me has ok rates, too.
Fourth is the bank.... up to 3% exchange fees "spread" even when they say "no fee", there is a spread.
Fifth is the exchange places near tourist spots. (rip offs)

Novik

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Re: Transferring Large us $$ to Canada
« Reply #6 on: April 17, 2019, 10:39:38 AM »
A couple things from someone who moved a bunch of USD into Canada recently:

- As a US citizen, you may want to keep the money in USD because the easiest/allowable investment are in USD anyways  (may be less relevant because you want a mortgage, I know)

- As a US citizen, be wary of Norbert's gambit, as I believe it ends with you holding and selling Canadian domiciled ETFs. Doing so, however briefly, may trigger all sorts of nasty IRS reporting requirements around PFIC. IMO not worth the risk. More info that came up on a quick search of "Norbert's gambit PFIC": https://www.reddit.com/r/CanadianInvestor/comments/9z1hj2/need_to_norbert_gambit_25000_usd_back_and_forth/

I recommend looking into places (not banks) which offer low forex spread, as Goldielocks mentioned.

FIRE Artist

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Re: Transferring Large us $$ to Canada
« Reply #7 on: April 18, 2019, 06:21:40 AM »
So I did this several years ago, but it was pretty straight forward.   

I bank with RBC, I had USD savings account with them and in my Direct Investing account I also has USD and CND unregistered accounts.  All these accounts were easily opened online I believe.
 The funds were wired to the savings account first.

The bank asked me where the funds came from. Not a big deal, just a statement, no evidence required.  The funds were held for a predetermined amount of time before being cleared. 

I then transferred the funds to my USD investment account. Did the Norbert Gambit with RBC stock.  Called the bank help desk and had them journal the RBC stock to the CND side of my account (from the video someone shared above, it looks like the call may no longer be necessary). Sold the stock. The overall ďfeeĒ was tiny in comparison to what it would have cost me to exchange through the bank. 
« Last Edit: April 18, 2019, 10:16:57 AM by FIRE Artist »

MustacheAndaHalf

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Re: Transferring Large us $$ to Canada
« Reply #8 on: April 19, 2019, 03:00:54 AM »
Different amounts in foreign bank accounts triggers various filing requirements, like FBAR.  And those thresholds change if you are residing in the U.S. vs abroad.  I'd recommend you look up those various limits for FBAR and additional IRS filing requirements.  I think $300,000 exceeds them all, and will cause additional paperwork.  You might be able to avoid some paperwork if some money is in the U.S., and some is in Canada.

Try to think of this as the U.S. Treasury having no idea if you're a money-laundering criminal or a U.S. citizen moving abroad.  Some day they might introduce a "same country exception" to the filing requirements, but it hasn't happened yet.  That's also the reason it's really important to file FBAR once you exceed $10,000 in accounts overseas.  The penalties are staggering for willfully failing to file.

coco1106

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Re: Transferring Large us $$ to Canada
« Reply #9 on: May 03, 2019, 01:49:27 PM »

  Thank you all for the reply's.

Mathieu

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Re: Transferring Large us $$ to Canada
« Reply #10 on: May 24, 2019, 02:52:10 AM »
Hi Coco,

I'm also in the process of relocating to Canada, and face the same situation of transferring a large sum of money. However mine is in the 5-figure range.

So here's another option that I will use: Transferwise. The overall cost of a transaction using this service will be about 0.4% of the overall sum (i.e. outgoing wire transfer + exchange rate + incoming wire transfer), and the money typically reaches my Canadian account within 24 hours. Another pro is that it's very easy to use.

I hope this helps. Good luck!

If you want to give it a try here's a referral link: https://transferwise.com/u/mathieup109
I'm using it both from USA-based USD account and France-based euro account.

kenmoremmm

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Re: Transferring Large us $$ to Canada
« Reply #11 on: April 29, 2021, 04:44:20 PM »
Try to think of this as the U.S. Treasury having no idea if you're a money-laundering criminal or a U.S. citizen moving abroad.  Some day they might introduce a "same country exception" to the filing requirements, but it hasn't happened yet.  That's also the reason it's really important to file FBAR once you exceed $10,000 in accounts overseas.  The penalties are staggering for willfully failing to file.
I know this thread is old, but this comment jumped out at me. Are you saying, that if a US citizen moves to Canada, but before they move, they transfer money to a Canadian bank account > $10k USD, then you need an FBAR?

If, instead, you put your money into TransferWise (now just Wise), will that trigger an FBAR? I just (like this morning) wired $860k to Wise so I can convert from USD to CAD for a future home purchase in Canada when we move later this summer.

FLBiker

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Re: Transferring Large us $$ to Canada
« Reply #12 on: April 30, 2021, 07:27:12 AM »
Try to think of this as the U.S. Treasury having no idea if you're a money-laundering criminal or a U.S. citizen moving abroad.  Some day they might introduce a "same country exception" to the filing requirements, but it hasn't happened yet.  That's also the reason it's really important to file FBAR once you exceed $10,000 in accounts overseas.  The penalties are staggering for willfully failing to file.
I know this thread is old, but this comment jumped out at me. Are you saying, that if a US citizen moves to Canada, but before they move, they transfer money to a Canadian bank account > $10k USD, then you need an FBAR?

If, instead, you put your money into TransferWise (now just Wise), will that trigger an FBAR? I just (like this morning) wired $860k to Wise so I can convert from USD to CAD for a future home purchase in Canada when we move later this summer.

I'm not a tax expert, but I think it depends on whether or not Wise counts as a foreign account (rather than the denomination).  Regardless, you'll have to do it if you send the money to an account you own in Canada.  We had to fire an FBAR as part our tax return this year (we moved to Canada in July 2020) and it wasn't a big deal.  We did use a professional crossborder tax advisor for this year, though, just to be sure we did everything right.

On the Canada side, you do get a 1 year exemption from having to do T1135 in your first year of residency.  We moved our taxable account, but we may still have to do it for our tax sheltered accounts (a question for our tax guy once he's through the busy season).

norajean

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Re: Transferring Large us $$ to Canada
« Reply #13 on: April 30, 2021, 07:52:38 AM »
Could you physically take the cash with you when you move? Are you driving? I may sound like a lot but you might be amazed at the cash sums people actually move around pretty routinely.

kenmoremmm

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Re: Transferring Large us $$ to Canada
« Reply #14 on: April 30, 2021, 03:33:45 PM »
Could you physically take the cash with you when you move? Are you driving? I may sound like a lot but you might be amazed at the cash sums people actually move around pretty routinely.

I'm trying to get it converted into CAD ASAP. I've already dillydallied enough to watch the exchange rate go from about 1.30 to 1.23. That's $61k I've "lost" so far. I just need the bleeding to stop. I don't even care if the USD rebounds against the CAD.

FLBiker

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Re: Transferring Large us $$ to Canada
« Reply #15 on: May 01, 2021, 12:27:45 PM »
Could you physically take the cash with you when you move? Are you driving? I may sound like a lot but you might be amazed at the cash sums people actually move around pretty routinely.

I'm trying to get it converted into CAD ASAP. I've already dillydallied enough to watch the exchange rate go from about 1.30 to 1.23. That's $61k I've "lost" so far. I just need the bleeding to stop. I don't even care if the USD rebounds against the CAD.

I don't think you'd want to do this anyways.  I don't think you'd get a better exchange rate in Canada (I could be wrong) and I think you'd definitely raise eyebrows (and possibly risk confiscation) at the border.  In my younger (crazier) days, I used to bring my annual savings home from Taiwan to America like this -- I used to exchange it to US dollars in Taiwan and sneak it home on the airplane.  There was really no reason to do that, but it seemed like a good idea at the time.

nereo

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Re: Transferring Large us $$ to Canada
« Reply #16 on: May 01, 2021, 04:57:25 PM »
You are required by law to report to the boarder agents anytime you cross with more than $10k in cash.  You can do it, but it will certainly raise a lot of questions and additional scrutiny.  Iíve also not found the spread on exchanging cash to be any more favorable in Canada than in the US (actually, Iíve found it to be slightly worse).

Ultimately carrying cash doesnít solve the problem of how to convert said money into another currency. It just adds additional risk (i.e. theft) and paperwork without providing any tangible benefit that I can see.