Inquiries About Moving My Brokerage Account Abroad
Summary of User Inquiry and Solutions:
- Main Problem: The user is concerned about the implications of moving out of the U.S. on their ability to maintain and manage their brokerage account, including deposit capabilities and investment activities.
- Users can continue depositing funds into their brokerage account from a U.S. bank account after relocating, but must notify Fidelity of their new address.
- Account restrictions may apply, such as limitations on purchasing mutual funds and certain features like check writing or debit cards, depending on the country of residence.
- To ensure correct tax treatment, users must submit IRS Form W-8 to certify their foreign status, which affects tax withholding rates based on tax treaties.
Here’s the full thread
Dear fidelity may I ask if I decide to move out of the states to my home country am I still allowed to deposit to my brokerage account from money still in my us bank account then invest the amount so that I can keep my brokerage account active and may I ask regarding Roth IRA’s and HSA’s if dividend reinvesting counts to my contribution limit for the year also regarding 401k’s if I transfer it to a rollover IRA does it go to my contribution limit?
May i add a follow up question if the dividend reinvestment counts toward my account activity
Hello there, @lowege. I’ll provide you information.
First, we will not require you to liquidate your securities when you are moving from the United States to a foreign country. However, restrictions and requirements may be added to the account to comply with applicable international laws and regulations. Once your relocation is finalized, you’ll want to notify us and update your address.
The mentioned limitations and restrictions placed on your account aren’t the same for every country. That said, generally, these restrictions include the following:
• Unsolicited trades for most securities, like stocks, Exchange Traded Funds (ETFs), and Certificates of Deposit (CDs), will continue to be allowed, but purchases of new mutual funds or adding to existing funds will be unavailable
• Cash added to the account (from the sale of securities or otherwise) will no longer purchase into a core money market position but will be held as a cash credit balance (due to restrictions on mutual fund purchases)
• Features such as check writing, debit cards, or margin may also be restricted in certain countries
Finally, as far as taxes go, Fidelity must also have a Certificate of Foreign Status, which is satisfied by submitting the corresponding IRS Form W-8. This information is required for U.S. tax withholding purposes on income earned in your Fidelity account, and withholding rates are based on tax treaties with the U.S. and the country you reside in. If your foreign status is not certified, you may be subject to mandatory backup tax withholding at the maximum tax withholding rate. Once you update your foreign status, in most cases, Fidelity will issue tax form 1042-S for the current and future years’ tax reporting. This form reports U.S. sources of income and any nonresident alien taxes withheld.
Foreign Status Certification (IRS Form W-8): https://accountmaint.fidelity.com/ftgw/Profile/action/ew8
Please let us know if you have additional questions! 🟢