Potential Issues with setting up Interactive Brokers Account then changing tax residency....

[WorldCitizen99]

Let's say I set up a personal and a corp account as a Canadian resident then I change my tax residency within a year and start a new company in the new jurisdiction.
What are the potential negative consequences?
Is switching tax residencies under Int Brok (or another broker) a fairly seamless process?
Would I have to sell all my assets and rebuy them under the new accounts in the new jurisdiction?
This might not be desirable if the securities were running at a loss
Would there be a difference between the corporate acct vs the personal acct in this regard?

Last edited: Feb 18, 2023

 

[Larin]

For the personal account normally its not a problem to change your tax residency. Depending on where you move to they will transfer your account to a different IBKR entity that manages that region. Since you will be under the new jurisdiction the laws and regulations of that jurisdiction will apply. That means that certain features, plans or rates may become available/unavailable. Your portfolio would be moved automatically.

If you start a new company in a new jurisdiction and you want to transfer your portfolio from the existing company (because you want to close it for example), then you will need to contact IBKR about that. I am aware of the situations where they transfer between individual and corporate accounts quite seamlessly. Not sure how easily it would be to do so between companies. Better to inquire with them.

 

[zuyderz]

My spouse recently changed tax residence for her IBKR account. IBKR required her to first open a new account with the new residence info and then authorize the transfer of all the assets from the old to the new account. Was a fairly simple process.

 

[WorldCitizen99]

Larin said:
For the personal account normally its not a problem to change your tax residency. Depending on where you move to they will transfer your account to a different IBKR entity that manages that region. Since you will be under the new jurisdiction the laws and regulations of that jurisdiction will apply. That means that certain features, plans or rates may become available/unavailable. Your portfolio would be moved automatically.

If you start a new company in a new jurisdiction and you want to transfer your portfolio from the existing company (because you want to close it for example), then you will need to contact IBKR about that. I am aware of the situations where they transfer between individual and corporate accounts quite seamlessly. Not sure how easily it would be to do so between companies. Better to inquire with them.
Click to expand...

I'm looking at starting a US LLC with the parent company either being Canadian, or from another country if I change the tax residency. The question will be whether IB will let me sign up as a US entity or will require me to sign up as the residency of the corp to which the income will flow-through. I have a meeting with a US accountant tonight and will write the answer in this thread. Thx for your help!

zuyderz said:
My spouse recently changed tax residence for her IBKR account. IBKR required her to first open a new account with the new residence info and then authorize the transfer of all the assets from the old to the new account. Was a fairly simple process.
Click to expand...

OK it is reassuring to know that at least from the personal (as opposed to corp) side of things, it seems easy.

 

[zuyderz]

Talk to John C. at IBKR. Really helpful guy, who will find your answer.

John C. Cracraft
Sales Representative
Interactive Brokers Corp.
A Member of the Interactive Brokers Group
203 618 5971
[email protected]
www.interactivebrokers.com
3 Pickwick Plaza
Greenwich, CT 06830

 

[WorldCitizen99]

Awesome - thx for the contact!

 

[MarkusM]

WorldCitizen99 said:
Awesome - thx for the contact!
Click to expand...

Have you got an answer?

 

[WorldCitizen99]

He said I could use the LLC for an institutional account and then just state whatever tax residency I am when they ask

 

[zzzzzz]

Those of you who actually changed tax residency for personal account at IBKR, which documents and information connected to residency they want to see?

On the website I read that I (non-US citizien, US nonresident alien) would have to change from current IBKR entity to IBLLC-US and assets are then transferred from current entity to IBLLC-US.

Documents needed:
- proof of identity (passport, id card...) ✓
- proof of address (utility bill, bank statement...) ✓

Also needed:
- residential address in new country ✓
- phone number in new country ✓

Questions:
- do they ask for long-term visa or residence permit of the new country you reside in?
- form W8BEN: is foreign TIN mandatory only if you claim reduced rate of withholding tax under DTT between new country you reside in and US?
- do they ask for lease agreement or proof of home ownership?

Anything else?

 

[Mike Williams]

I could not imagine a setup where a Canadian company owns a US LLC and the Canadian shareholder is resident of another 3rd party country. The WHT for a non tax resident of Canada are high, two or three tax returns to file, potential estate issues with the US unless the Primary shareholders are resident in a country with an estate treaty with the US and potentially the US will view this entire setup under their anti-aversion rules.

 

[Meta]

zzzzzz said:
Those of you who actually changed tax residency for personal account at IBKR, which documents and information connected to residency they want to see?

On the website I read that I (non-US citizien, US nonresident alien) would have to change from current IBKR entity to IBLLC-US and assets are then transferred from current entity to IBLLC-US.

Documents needed:
- proof of identity (passport, id card...) ✓
- proof of address (utility bill, bank statement...) ✓

Also needed:
- residential address in new country ✓
- phone number in new country ✓

Questions:
- do they ask for long-term visa or residence permit of the new country you reside in?
- form W8BEN: is foreign TIN mandatory only if you claim reduced rate of withholding tax under DTT between new country you reside in and US?
- do they ask for lease agreement or proof of home ownership?

Anything else?
Click to expand...

I've done that. IB have a few legal entities for different regions, I was moving between two countries served by the same entity, so no transfers of stocks. Very easy. If I recall correctly they wanted to see address proof (utility bill) and to know the new TIN. Maybe there was an option to claim that you don't have a TIN yet, but I just told them mine. They did not want tax residency certificate and certainly did not ask for phone number or residence permit. Don't remember regarding the lease agreement, I think no.
Once again it was easy thing to do.