Canadian Residency
Canadian Residency
I would like to hear from other Canadian teachers and how they are dealing with their residency issues. Do you own a home? How much "stuff" do you have at home? What other ties do you have? Have you ever gotten a definitive answer from Revenue Canada about your residency?
Re: Non-residency and taxation of Canadians
Beenthere (looks like you're actually "going there" : )
Do a search for the following thread that has already been discussed:
Posted: Tue Jun 27, 2006 2:28 am Post subject: TAX CANADA
As to the "How much stuff do we have there?" - We have a 10 X 20 storage unit in Penticton that has a house full of stuff - it's been sitting there waiting for us for the past ten years - who'd have thought? haha
Do a search for the following thread that has already been discussed:
Posted: Tue Jun 27, 2006 2:28 am Post subject: TAX CANADA
As to the "How much stuff do we have there?" - We have a 10 X 20 storage unit in Penticton that has a house full of stuff - it's been sitting there waiting for us for the past ten years - who'd have thought? haha
Yeah, we're gone
Hey Dave,
Where in China do you teach? We are also from BC (Nelson) and are heading to Shanghai in July. This residency thing is driving me crazy and after paying an "in the know" accountant $400 I still don't know and I think our best bet is to just lay low and to not attract any attention from Revenue Canada. However, I also think its best to reduce the number of ties we have and I will be actively doing that this summer.
Where in China do you teach? We are also from BC (Nelson) and are heading to Shanghai in July. This residency thing is driving me crazy and after paying an "in the know" accountant $400 I still don't know and I think our best bet is to just lay low and to not attract any attention from Revenue Canada. However, I also think its best to reduce the number of ties we have and I will be actively doing that this summer.
Shanghai is the only place to be
Gotta love those Nelson hot springs - we were in Creston for one year a looooonnnggg time ago.
Don't sweat the non-residency thing. Once you get your NR status you're good to go. If you are unsure what to cut ties with what not to - I'd be glad to help you out (did you read all the posts on the other discussion thread?). Most accountants have no hands on experience. When we were first planning to go - back in '97 - I applied and rec'd NR status on my own then I went to see an accountant (expensive $$) in Vancouver who basically said the work was done. We kept our house for five more years and rented to some teacher friends but in the end sold it as we did not see ourselves returning to the area (Keremeos) and I did not enjoy filing the tax returns and managing the property from afar. Once you rid yourself of your home you don't really have to worry about taxes anymore. I do plan to 'plan' my repatriation with a professional accountant before actually returning to Canada - however, we have no plans for that in the near future.
What school did you sign with?
Don't sweat the non-residency thing. Once you get your NR status you're good to go. If you are unsure what to cut ties with what not to - I'd be glad to help you out (did you read all the posts on the other discussion thread?). Most accountants have no hands on experience. When we were first planning to go - back in '97 - I applied and rec'd NR status on my own then I went to see an accountant (expensive $$) in Vancouver who basically said the work was done. We kept our house for five more years and rented to some teacher friends but in the end sold it as we did not see ourselves returning to the area (Keremeos) and I did not enjoy filing the tax returns and managing the property from afar. Once you rid yourself of your home you don't really have to worry about taxes anymore. I do plan to 'plan' my repatriation with a professional accountant before actually returning to Canada - however, we have no plans for that in the near future.
What school did you sign with?
A car???
Us Canadians sure do fear the long and greedy arm of our government.
I plan to spend the summer in Nova Scotia this year and would like to buy a car (I looked into long term rentals and it's too expensive). I understand that residency is somewhat of a point system, too many ties and it's pay-up, but does anyone have any idea as to how dangerous it would be to buy and insure a car?
I plan to spend the summer in Nova Scotia this year and would like to buy a car (I looked into long term rentals and it's too expensive). I understand that residency is somewhat of a point system, too many ties and it's pay-up, but does anyone have any idea as to how dangerous it would be to buy and insure a car?
As far as I can tell you are probably not at any more risk than if you don't buy the car. Our family motto is now "Duck and Cover", don't make yourself obvious and they won't find you, especially using your SIN. What really irritates me is that you can't get a straight answer from anyone and their standard reply is "Every situation is different". Well they don't have to be different if you made the rules a little more straight forward and simpler. Can you sense the frustration coming through.
Things Have Changed
In case you didn't get the memo...CCRA has changed the rules. After a lot of research on this topic, it seems that our friendly tax man isn't so friendly after all. The 'two year rule' is over. As of 2001 new rules came into effect that put greater emphasis on ties rather than time. So even if you have been overseas for 8 years or so, you could still be in for a very expensive surprise on your return to Canada. You know that 1986 Civic you had parked in your brother's driveway, well, that's a secondary tie and counts against you. Driver's license? Another tie. Passport (!!!??? This one is new!!) another tie. A storage space with that kayak that you didn't really want to sell? Another tie. A bank account in Canada that you make your student loan payments from? Another tie. Woops, over the limit. You owe. How much? Who knows. As other posters have mentioned the rules are ill-defined and intentionaly gray. I get the feeling it's based more on a "tax payer's" ability to fight it in a court than the actual strength of the ties. But it's still the early days. Changes made in 2001 don't work their way through returning Canadians, submitted returns, penalties assessed, court appeals etc... for a few years. So the results are just being made public now. And it doesn't look good. I don't mean to panic anybody but with a summer coming up this might be a good time to clean up some loose ends. Cancel bank accounts (or atleast make sure they are in non-resident status so withholding tax of 25% is assessed on interest (interest? what interest?)) Sell that car. Apply for a driver's license in your teaching country and cancel the Canadian one. Sell your kayak and cancel the storage room. Cancel all magazine subscriptions in your name (I'm actually serious on this one). Give an overseas address to everyone that sends you mail. Even MEC. (maybe you can order a new kayak...)
What we really need is some pissed off doctors returning to Canada from Saudi with huge holdings and the motivation to fight. Some friendly precedents would do us teachers a world of good. The chances of one of us having the funds to fight are government are, well, less good.
What we really need is some pissed off doctors returning to Canada from Saudi with huge holdings and the motivation to fight. Some friendly precedents would do us teachers a world of good. The chances of one of us having the funds to fight are government are, well, less good.
Benefits of being a "factual resident"
Am I the only Canadian out there who WANTS to be considered a "Factual Resident"?? I am a single mother of 2, living in China for the past 2 years, and have kept my car, bank account, some belongings in storage so that I WOULD be considered a resident.
I pay Chinese tax on my income, and claim the Foreign Tax Credit. I did have to pay a little Canadian tax this year, but this is more than offset by the Child Tax Benefit I receive each month. There are other Canadian families at the school where I work who do the same thing. Obviously, without kids the whole situation would be quite different.
I pay Chinese tax on my income, and claim the Foreign Tax Credit. I did have to pay a little Canadian tax this year, but this is more than offset by the Child Tax Benefit I receive each month. There are other Canadian families at the school where I work who do the same thing. Obviously, without kids the whole situation would be quite different.