A Canadian’s Best Tax Haven: The US

Take your money and drive! (Cross-Border Series) by Mr. Robert Keats, CFP®, RFP, MSFP

My first book, The Border Guide, is now in its 12th edition and a Canadian bestseller. When I saw the number of Canadian baby boomers retiring was up to about 1,000 each day, I thought it was time for a simpler more direct decision-making tool to assist Canadians in making the right choice when moving to a warmer climate and lower taxes. I decided to write A Canadian’s Best Tax Haven: The US/Take Your Money and Drive (now in its 2nd edition). In it, I share with you updated information and a new prospective on how to realize your cross-border dreams!

This book will help you determine if a lifestyle choice that involves a climate with year-round golfing and sandy beaches is not only possible but can also save you money in the form of lower cost of living and lower income taxes. This reduction in living expenses and taxes can allow you the ability to enjoy a lifestyle that most have never dreamed possible.

The inspiration for the book came to me a few years ago when I was asked to speak to a group of Canadians in Dublin, Ireland. These Canadians were looking for the golden ticket by trying to find a tax haven that would allow them to more efficiently use their lifetime of savings to maintain that desired lifestyle without having to pay nearly half of their income to the government in the form of income taxes. At this conference in Dublin, there were multiple lectures and seminars by major financial institutions from many of the major tax havens of the world pontificating on the benefits of these Canadian attendees moving to their jurisdiction.

Most of the attendees of this conference had read the book Take Your Money and Run! by Alex Doulis. He did an excellent job writing his book and it was an interesting read, allowing the readers to dream of living on a yacht or some tropical island free from any government taxing authority. He made it sound very romantic and exciting, but the bottom line is that it is totally impractical for most Canadians and would not likely result in any net cost of living and income tax reductions. Who would want to live on a yacht bobbing up and down from port to port with nowhere to ever call home while all the while looking over your shoulder to make sure the taxman is not bearing down on you? It may be fine for a few people or for a little while; however, yachting is very difficult and expensive not to mention confining, nauseating, and potentially dangerous. Similarly, trying to find that ideal tax haven island in the middle of nowhere is not very practical for most people, for the reasons I outline throughout the book.

My 30 years of experience in advising Canadians in international tax and financial planning matters told me that this desired lifestyle and reduction in living expenses is available to most Canadians, literally right beneath their noses, in the form of the United States of America. I’m also of the firm belief that “Give to Caesar what is Caesar’s” (the Gospel of Mark 12:17) and thumbing your nose at the Canada Revenue Agency (CRA), although sometimes tempting, does no one any good. Keeping the CRA somewhat on your side by following its negotiated treaty rules, actually gives you greater freedom in your lifestyle choice and greater protection from an adversarial relationship that can cause you a lot of aggravation.

As you will see in several chapters of this book, I am quite fed up and disheartened with a small contingent of Canadian advisors who have very little knowledge about US tax and financial planning rules but pontificate to clients as if they were experts. They clearly do not understand how to use the US to assist Canadians to achieve their desired cross-border lifestyle and reduce taxes. These congregate of advisors, in my opinion, take advantage of a trusted relationship with their clients. They continually perpetuate myths and provide the wrong advice about the US due to ignorance, personal bias, or just plain laziness to take the time to get educated properly.

I make no apologies to the very profitable Canadian advisory industry whose primary purpose seems to be advising Canadians to take their money and go to the proverbial tax haven island in the middle of nowhere in an attempt to kiss the CRA goodbye. However, if they are sincerely interested in doing what is in the best interest of their clients, I do encourage these advisors to read this book. By reading this book they may change their perspective and help clients make the right choice as to which option is more appropriate for them, the US, or the traditional tax haven island.

This book will show Canadians a practical path to that desired lifestyle in a low tax jurisdiction with full protected access to Canada to invest, own a business, and visit family and friends without having to live on a rocky boat or an island in the middle of nowhere.

As with my authorship of The Border Guide, in order to prevent this book from becoming a dry, technical manual that is factually accurate but functionally useless, I have presented my ideas in a non-technical fashion. Certain concepts have occasionally been simplified in the service of readability. Sound professional advice is unquestionably recommended for the application of any of the ideas, suggestions, or techniques detailed in A Canadian’s Best Tax Haven: The US.

  • There are approximately 1000 Canadian baby boomers retiring each day looking for their place in the sun who have important lifestyle and financial decisions to make. Take Your Money and Drive helps them in making these critical choices simply and directly.
  • A great deal of Canadian advisors – accountants, attorneys and financial planners, through ignorance, laziness or just plain self-serving bias, perpetuate many myths about Canadians wishing to use the US for lifestyle and tax reduction strategies. These myths prevent Canadians from getting a complete picture in order to make the best decisions for themselves and their families with respect to their lifestyle choices and tax reduction. Take Your Money and Drive exposes these myths and explains why they are myths and why they are perpetuated to the detriment of usable solid cross-border financial advice.
  • High net worth Canadians seeking relief from high Canadian taxes are very frequently and erroneously advised by large accounting and law firms to go offshore to the tax haven island. Most Canadian families going to these tax havens suffer a reduction in their desired family and personal lifestyle choice, in effect letting the tax tail wag the lifestyle dog that they have worked so hard to create. Unfortunately, many families do not realize this until they do actually move and realize they have made a huge mistake. The US can meet these family lifestyle goals much more closely while at the same time using the Canada/US Tax Treaty to actually pay less tax than the traditional tax haven.
  • The US is the only tax haven Canadians can drive to, and it provides a much lower cost of living than the traditional tax havens at the same time. The US also provides treaty protection to allow families to visit Canada frequently, own property there and conduct business there easily without fear of The Canada Revenue Agency coming after them like the CRA has and does when these families live on a tax haven island without treaty protection.
  • Take Your Money and Drive proves that out of 13 possible types of income an individual or family can have, the US beats the traditional tax haven. The US provides Canadians lower tax rates than if they lived on a traditional offshore tax haven jurisdiction for 10 out of the 13 types of income and tied for the other 3. In addition, the book shows that for 13 out of the 13 types of income the US provides lower taxes then Canadian tax rates all 13 times.
  • Take Your Money and Drive exposes the hidden tax of the traditional tax havens, so that Canadians who have been advised to or desire to live on a tax haven island in the middle of nowhere will be able to see exactly what it is going to cost them to live in such a jurisdiction relative to the US. The US consistently provides a lower cost-of-living, a better lifestyle and lower taxes. Take Your Money and Drive will expose this upfront before families make a major commitment of time and effort to move to a tax haven island and find out they have made a huge mistake.
  • Take Your Money and Drive shows Canadians how they can get the best out of the Canadian and US medical systems. It exposes why this is not possible using countries other than the US as their tax haven from high Canadian taxes. This can be a life-saving, lifestyle improving medical coverage for individuals and families.