I'm a Canadian citizen interested in utilizing a US trust to overcome a regulation in Canada that limits a certain type of Margin account on Options Trading. This type of Margin account is widely used in the US. However, one benefit of being Canadian is there is income Tax on only half of the Capital Gains, and I want to retain that.
My thought is to establish a US trust, and have the trust open a trading account. The Trustee may have to be hired, or perhaps a US corporation that I form. Each year all of the profit would be flowed through to me, the only beneficiary. I would enter trades through an intermediary, while I reside in Canada. IRS told me today that there is no witholding tax anymore for Canada, though previously it was 30%. I hope to be able to claim the income in Canada as a Capital Gain/Loss, and I expect the trust would pay no Tax since it is flowing everything out each year. I would have to get a WBen, so the trust doesn't withhold.
Does this work?
My thought is to establish a US trust, and have the trust open a trading account. The Trustee may have to be hired, or perhaps a US corporation that I form. Each year all of the profit would be flowed through to me, the only beneficiary. I would enter trades through an intermediary, while I reside in Canada. IRS told me today that there is no witholding tax anymore for Canada, though previously it was 30%. I hope to be able to claim the income in Canada as a Capital Gain/Loss, and I expect the trust would pay no Tax since it is flowing everything out each year. I would have to get a WBen, so the trust doesn't withhold.
Does this work?