Comments on: Living Abroad And Becoming a Non-Resident

By: Chris

Chris — Sat, 21 Jan 2012 01:51:36 +0000

Hello Tax Guy,

Thank you for the informative website.

I just accepted a job to move to a country that has no tax treaty with Canada. I am considering declaring non-residency, however this year I will also be receiving a lump sum of money from my life insurance that’s coming to an end.

I will be declaring non-residency as of Feb 01, 2012. But the insurance money will not coming until at least June/July, 2012. What will happen then? Will I require to file that insurance income next year as a non-residence? or I should be reporting that income to the new country I will be paying tax to?

Thank you for your time.

By: Tax Guy

Tax Guy — Mon, 21 Mar 2011 07:54:45 +0000

I can’t provide advice on this. I suspect that as long as it is vacation property, you are probably OK. You should work with someone you have hired.

By: Lynnie

Lynnie — Sun, 20 Mar 2011 06:49:51 +0000

Sorry. I forgot to mention that I purchased a rental property the year I was back in Canada (2003). It’s all legitimate with a property manager who manages it and withholds the 25% tax. This is the other residential tie I was kind of referring to in my previous post.
Thanks again.
Lynnie

By: Lynnie

Lynnie — Sun, 20 Mar 2011 06:47:22 +0000

Dear Tax Guy,
This is a great site! I’ve learned quite a lot from the responses you’ve offered.

My situation is an interesting one and a bit complicated so I’ll attempt to explain in point form.
1. have lived in the Middle East for about 15 years.
2. filed taxes on the year I left.
3. moved back to Canada in 2002 for about a year as husband moved to Africa and I was supposed to join him. This never happened as the country was too dangerous. I stayed in Canada until 2003. Filed my income tax as a resident that year (husband is a Eurpoean with no status in Canada).
4. moved back to the Middle East in 2003 to work for a company who ensured me I was a tax payer. Paid tax with them for 2 years.
5. When I filed my taxes in 2005 the government informed me that I was a non-resident.
6. Spent about a year and a lot of money sorting this all out. I hired a reputed tax specialist company in Calgary. They advised me to not submit the NR73 as the government had already informed them that I was considered a non-resident.
7. Everything was fine, but now I am going to work for a Canadian company in the Middle East who require a letter from CCRA which indicates I am a non-resident.
8. have contacted the tax specialist company, but they are not responding to my emails.
9. Last summer I began construction of a seasonal dwelling in Canada. I have absolutely no intention of ever living there again, but am afraid that this further ‘residential tie’ may change my status.
10. I do not want to contact CCRA to raise any red flags.
I realize this is a very complicated case and am well aware that each case is considered different with CCRA. I guess my question is, ‘Would you contact CCRA’ if you were me? I believe I am a non-resident who simply has a rental property and, soon, a seasonal residence. I don’t believe the tax specialist company will reply to my emails as I haven’t used their services since 2008 as my tax filing became much more straightforward after all my issues were sorted out.
Any advice would be greatly appreciated. If you can’t offer any, thank you just the same.
Lynnie

By: Tax Guy

Tax Guy — Mon, 07 Mar 2011 23:04:16 +0000

I can’t comment on whether you are a resident of Canada or not. I would suggest you contact accountant to assist you.

By: traveler

traveler — Sun, 06 Mar 2011 08:01:42 +0000

Hello.
I was researching the pension and residency subject, trying to count the years to see my eligibility. It says that I will be able to collect my pension while living outside of Canada only if I have been a resident of Canada for 20 years. I am a Canadian citizen, after immigration. After a few years in Canada I left for Japan for a few years, studying there. No income, as I had sponsors and homestay. I kept the driver’s lisence, of course the passport. Then I returned. I moved to another province, and had no problems with updating and getting any new documents. I did all the taxes as I zero income. I was actually accepted on medical income assistance. After a few years, I left traveling for a few years, visiting many countries. I kept my drivers license, banks, etc. Then came back, worked, stayed a few months, then left traveling. All income tax returns are up to date. It’s been traveling using my save in Canada money, no income abroad. I have never considered severing ties with Canada.
My question is: do those years of travel add to my 20 years residency in Canada or not?

By: Tax Guy

Tax Guy — Wed, 02 Mar 2011 15:39:40 +0000

Oscar,
Canada has treaties with other countries, including the UK. The whole tax issue depends on whether you are considered a Canadian resident.

By: oscar

oscar — Wed, 02 Mar 2011 09:11:33 +0000

Hello
I am a canadian citizen who works in the oil and gas industry. i have to spend lots of time overseas, probably up to 8 months a year all together. I work for a large corporation so sometimes is hard to actually reach the right person. My company does not deduct any taxes on my monthly paystubs, but they pay afterwards according to where i have worked.
this has worked pretty good for me as i had worked mostly in the States; so i use the money that my compant pays as a credit back in Canda. my problem is that in 2010 i actually worked a lot in the UK, Norway, Holland and Brazil.
Does Canada have the same type of agreements with these countries as we have with the US?
a few of my coworkes simply do not have to pay taxes in their respective homecontries as they spend lots of time overseas…does this apply in Canada?
thank you very much

By: Rheann

Rheann — Wed, 02 Mar 2011 02:22:51 +0000

We kept all bank accounts, credit cards, professional memberships and furniture. We also have our home, but it is rented to friends. I just assumed we met residency requirements with this but now worry that because we rent our house we may not…this would mean big penalties for investing in RESPs and TSFAs. If it is determined we were non-residents.

By: Tax Guy

Tax Guy — Wed, 02 Mar 2011 01:16:49 +0000

Whether you are a resident of Canada is a question of fact or of Canadian law. It has nothing being allowed “allowed” or not. Also, there is no such thing as a “deemed non-resident.”

As I said you are either a factual resident: Where the facts presented show that you are a resident and residential ties are a strong indicator of residency. Bank accounts, drivers licenses, club membership, subscriptions etc. can lead t you being a resident.

When you cease to be a resident, you are deemed to have disposed of your worldwide assets at FMV and must pay an exit tax on any gains.

If you are not a resident you file your tax return and disclose the date you became NR. If there are large gains, you should seek the assistance of a professional.