American Citizen Living In Canada -Dual??

[Hank]

After FIRE I ended up in Canada and generally it has worked out okay. I miss the US but probably won't be returning there.


My dilemma is whether I should get Canadian citizenship which I qualify for and merely have to take the oath. Several things trouble me: The oath is considered an potentially expatriating event as is pledging your allegiance to the King. There is no getting around the oath. I tried.


I know that today, the US says it doesn't matter unless you specifically and overtly do these things as a way of renouncing your citizenship but it seems to me it opens up the possibility that someday Congress could start to enforce these rules. I don't really gain much as an American if I have a Canadian passport. It would be nice to vote but that's about it.


Losing my Canadian citizenship after I gained it wouldn't bother so much but losing my American citizenship would cause a lot of problems since it would trigger the newer Exit Tax and also a distribution tax (30%) on your IRA accounts. Although the possibility is unlikely I could avoid it.



Are there any American's who are in Canada that have gone through this?
Should I become a dual citizen?



Thanks.

 

[brett]

I live in Canada. I have known quite a few dual citizens.

The ones that I know well have been in Canada for some time. They have never had their US citizenship questioned. The closest any have come is very occasionally a US border guard hassling them as to why they are travelling on a Canadian passport vs a US passport. I mean really...what does it matter? There is so much back and forth between the countries.

I know three who decided to give up their US citizenship. For tax reasons. They had lived/worked in Canada for years and had no intention of returning to the US.

All three became tired of filing US taxes and in some instances paying tax. Oddly enough all three told me they had to get an IRS clearance certificate of some sort in order to commence the process of renouncing their US citizenship!

I really do not think that you have anything to concern yourself with. I daresay that there are thousands of people with dual US/Canadian citizenship.

 

[Sunset]

Get the dual.
That way you ensure you can stay, and can enter Canada.

A US citizen can be refused entry into Canada for various reasons, but if you are a Canadian citizen you can enter even if you have been convicted of murder.

Each country has the oath thing, that seems to exclude other countries, but it's just not true, and was removed many many decades ago.

 

[savory]

I got my dual under the program that was called the Lost Canadian law. When my folks moved to the states from Canada in the late 40s, USA & Canada forced them to surrender their Canadian citizenship if they accepted USA citizenship. That is what they did.

Moving forward, Canada allowed the children of these people to claim their Canadian citizenship. That's what I did under the Lost Canadian process.

For the expected remainder of my life, I felt the option of being able to enter Canada at my choosing was an advantage. The downsides, which one can make a short but unlikely list, did not convince me not to pay $400 for my citizenship card. Which would also be useful to my DW.

I have not applied for a passport but would if I felt it necessary

 

[brett]

No downside. Only upside.

 

[ShokWaveRider]

I have both US and Canadian and currently live in the USA. No downside with Canadian citizenship. More of the downside is with the US citizenship if one lives abroad as their archaic tax laws are based on Citizenship not residency. Honestly, even though I live in the USA, I would have not bothered to get citizenship if I was smart enough to know the tax laws when I did. I would have just kept the green card.

 

[Sunset]

I have both US and Canadian and currently live in the USA. No downside with Canadian citizenship. More of the downside is with the US citizenship if one lives abroad as their archaic tax laws are based on Citizenship not residency. Honestly, even though I live in the USA, I would have not bothered to get citizenship if I was smart enough to know the tax laws when I did. I would have just kept the green card.

I'm dual.
I certainly thought about the US taxation issue before joining the US citizenry. It is a downside, however I like other aspects of the US life so much that I felt I won't move back to Canada or move to another Country.
So now I get to cast my vote in the future of this Country !

 

[brett]

A good friend of ours is dual. She has to submit US taxes. She has lived in Canada for 30 plus years.

She won a lottery last year. $100K.

Lottery winnings are not taxable in Canada. It was taxable income on her US tax.

She was not a happy camper and is taking the necessary step of ending her requirement to file with IRS each year. She is tired of paying to have her US tax return completed year after year and is now in the process of obtaining her IRS clearance certificate.

 

[rodi]

Here's what the US State department says on it.
https://travel.state.gov/content/travel/en/legal/travel-legal-considerations/Advice-about-Possible-Loss-of-US-Nationality-Dual-Nationality/Dual-Nationality.html

My husband and sons are dual citizenships (Italy, not Canada). At the time when we were making the decision to apply we looked at tax obligations and military draft issues (the boys were minors back then). Since Italy had eliminated the draft a few years earlier, we went ahead. (I say 'we' because I'm the one that gathered the documents to apply for the jure sanguines application.)

 

[Sunset]

A good friend of ours is dual. She has to submit US taxes. She has lived in Canada for 30 plus years.

She won a lottery last year. $100K.

Lottery winnings are not taxable in Canada. It was taxable income on her US tax.

She was not a happy camper and is taking the necessary step of ending her requirement to file with IRS each year. She is tired of paying to have her US tax return completed year after year and is now in the process of obtaining her IRS clearance certificate.

A big issue in my mind, is that people do get double taxed, or perhaps more rightly it should be called Maxed Taxed.
Generally affects a person if they have income from the "other" country, or live in the "other" country.

Meaning they pay the higher amount of the 2 countries taxation for everything whenever possible.
Good example is the Lottery winnings.

 

[Alan]

I live in Canada. I have known quite a few dual citizens.

The ones that I know well have been in Canada for some time. They have never had their US citizenship questioned. The closest any have come is very occasionally a US border guard hassling them as to why they are travelling on a Canadian passport vs a US passport. I mean really...what does it matter? There is so much back and forth between the countries.

I know three who decided to give up their US citizenship. For tax reasons. They had lived/worked in Canada for years and had no intention of returning to the US.

All three became tired of filing US taxes and in some instances paying tax. Oddly enough all three told me they had to get an IRS clearance certificate of some sort in order to commence the process of renouncing their US citizenship!

I really do not think that you have anything to concern yourself with. I daresay that there are thousands of people with dual US/Canadian citizenship.

No downside in my view to getting Canadian citizenship. (I am a dual US/UK citizen living in England)

By law you have to enter and leave on your US passport if you are a citizen. By law you are liable to taxation on your worldwide income regardless of where you live and you can’t give up your US citizenship until you are fully tax compliant.

A well documented instance of this happened in 2006 when Boris Johnson, was traveling on vacation to Mexico City with his family. Another US law is that you cannot transit the country without going through passport control and their flight changed in Houston. At check-in at Heathrow the agent saw that he was born in New York City and informed him that as a USC he needed to travel on his US passport which he didn’t have as he only lived in the USA for a short time as a child while his father worked there. He had to let his family board and then book a flight on a different airline that went to Mexico without changing in the USA.

He wrote a long article in the press about his experience and said that he was now giving up his US citizenship, but it took 10 years to sort out his taxes because he should have been filing US taxes for decades, and he finally completed the process in 2016.

https://www.theguardian.com/politic...6-uk-foreign-secretary?CMP=Share_iOSApp_Other

 

[GhostofTomJoad]

My best friend is dual, US/Canada. I dunno if he even bothers to file US 1040 every year. I suppose so, since he's collecting SS. He has it deposited into a credit union in the States. Also, he gets the Canada Pension by now, too. He's lived in Canada since 1987. When he enters Canada, he uses Canadian passport. When entering the USA, he uses the US passport. I think there is only upside, no downside to the dual arrangement.

I am dual USA/Ireland. Grandfathered-in. Never worked or lived in Ireland. Don't use the passport much. My traveling bug is kinda gone since i moved to Hawaii. So, especially in the winter, where would I want to go?

 

[ncbill]

I have both US and Canadian and currently live in the USA. No downside with Canadian citizenship. More of the downside is with the US citizenship if one lives abroad as their archaic tax laws are based on Citizenship not residency. Honestly, even though I live in the USA, I would have not bothered to get citizenship if I was smart enough to know the tax laws when I did. I would have just kept the green card.

Yep, the OP might consider giving up US citizenship after gaining Canadian if they retire to a country other than US/Canada.

Years ago I met a Canadian expat retired to Mexico & their tax situation was very advantageous...flat 15% tax on any Canada-sourced income (e.g. pension, RRSP withdrawals) & no income tax to Mexico since they didn't tax expats' retirement income at that time.

They kept their assets in US accounts...pre-9/11 the USA was a great tax haven for foreigners.

 

[brett]

Another friend with dual Canada/US citizenship is on the horns of a dilemma. He has lived in Canada for 20 plus years.

He is planning to sell his Canadian residence in preparation for retirement. At a minimum he expects to realize an $800-900K gain on the property. Perhaps more.

This is his current principal residence and as such will not be subject to income tax in Canada. It will be subject to tax in the US according to his US accountant.

He is now in the process of obtaining his IRS clearance in expectation that he will be renouncing his US citizenship prior to selling/realizing the gain in the following calendar year.

 

[GhostofTomJoad]

I've personally never thought in terms of renunciation of US citizenship. I have Irish citizenship, too. But the weather in Polynesia is much better. The cost of living might just be comparable between Ireland and Hawaii, too. Expensive. Europe is expensive. A big factor in NOT renouncing is that taxes are just not an issue for us. But there are wealthy people who renounce and then literally BUY a citizenship in the Caribbean, for instance. St. Lucia, Dominica, Grenada, St. Kitts & Nevis, Antigua & Barbuda. And there are others, around the world. Vanuatu. Comoros. OOPS, Comoros canceled their program in 2017. Note: I am not pushing Elma Global. But here are some options. Also, look at "Nomad Capitalist."
https://www.second-citizenship.org/permanent-residence/investment-programs-in-comparison/

 

[street]

Living close to the border I know of many people that are dual and many people that have married and live in US and some that live in Canada.

I think it would be a win to be dual citizens.

 

[Sunset]

My best friend is dual, US/Canada. ....... When he enters Canada, he uses Canadian passport. When entering the USA, he uses the US passport. I think there is only upside, no downside to the dual arrangement.

...

I used to do this, until a Canada Customs Agent gave me a stern lecture that I should only be using my US one.

I thought I was being more correct, but I was wrong.

So no need for the Canadian passport, as it does not prove citizenship anyway. I'll save on the renewal fees

 

[ShokWaveRider]

So no need for the Canadian passport, as it does not prove citizenship anyway. I'll save on the renewal fees

I do not bother either, too many hoops to jump through to get one when all your friends are from the USA.

I only keep my USA and UK passports. I am actually entitled to get 4 passports, but I stick with the 2.

 

[braumeister]

Dual citizenship has never had any real advantage as far as I can see.

These two countries are so "joined at the hip" that aside from tax issues I can't see anything worth worrying about. I go to Canada at least once a year because I like many parts of it (and some of my ancestors came from there). I also know a number of Canadians who have been spending at least part of every winter in the Florida panhandle for many years.

Canadians are always welcomed here and we seem to be welcomed there.

 

[Sunset]

^^^^^ I once encouraged a fellow worker to go visit Canada as he had never been there. At that point he told me he was banned from entering Canada as he got a DUI conviction here in the USA.

I forget how long the ban was for, either 5 or 10 years.

But just an example of how a non-Canadian can be refused entry. Had he been a Canadian, they would have had to let him in, even for a more serious criminal record like murder.

 

[Alan]

^^^^^ I once encouraged a fellow worker to go visit Canada as he had never been there. At that point he told me he was banned from entering Canada as he got a DUI conviction here in the USA.

I forget how long the ban was for, either 5 or 10 years.

But just an example of how a non-Canadian can be refused entry. Had he been a Canadian, they would have had to let him in, even for a more serious criminal record like murder.

There is always something like that that citizenship would overcome. Once we got our “green cards” in the USA it was made clear that a felony or other issue could result in deportation so we were keen on getting Citizenship to avoid that possibility for ourselves and our children as one never knows what the future holds. In 2019 while cruising from Fort Lauderdale to L.A. through the Panama Canal we met 2 folks with surprising stories. An American traveling with his elderly mother who had taken the place of his wife of 40 years because her Green card renewal had been denied, including on appeal and it was now in the hands of their lawyer. My wife met an elderly lady in the knitting circle on board who said she had expected to be traveling with her friend but her 4th Green card renewal had been rejected and she was in the middle of the appeal process.

Not only does dual citizenship remove the hassle of applying to renew every 10 years it avoids unexpected stressful interruptions of your life even after 40 or 50 years living in the country

 

[ShokWaveRider]

Not only does dual citizenship remove the hassle of applying to renew every 10 years it avoids unexpected stressful interruptions of your life even after 40 or 50 years living in the country

You have a point here, especially these days where anything can happen.