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Canada’s new #FHSA has different kinds. US citizens resident in Canada should avoid those administered by trustee (possibly creating foreign trust for US tax purposes). Stick with the basic “bank account” FHSA with no trustee and no (#PFIC) mutual funds. canada.ca/en/revenue-age…
https://twitter.com/ExpatriationLaw/status/1640886719460376576
General features of Canada’s new #FHSA: max contribution $8000 per year and $40,000 lifetime. Contributions tax deductible. Growth in plan not taxable. Distribution not taxable if used to buy first home. US citizens in Canada will need special planning. canada.ca/en/revenue-age…
A ”self-directed” #FHSA is possible which does NOT appear to be a “trust”. This would be good for US citizens (and all CDN residents) who want to invest in individual stocks. US citizens must avoid CDN mutual funds. canada.ca/en/revenue-age…
CDN #FHSA has other features including the ability to transfer #RRSP balances into it on a tax free (if not US citizen) basis. Financial planners will discover many ways the FHSA can be used. Another example of how “taxation” is about incentivizing behaviour and not just tax.
For CDN residents with US citizenship, the question is: “To #FHSA or not to FHSA, whether this better … It’s like the #TFSA question discussed here. citizenshipsolutions.ca/2022/12/10/to-…
The simplest way to think about the new Canadian #FHSA is that it is a tax deductible way to save and invest tax free for the down payment on a first home. Slightly harder for CDN residents with US citizenship to use it.
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