Relinquishing Canadian Residency
Relinquishing Canadian Residency
Is there any point in relinquishing my Canadian residency? I understand one can inform the Canadian government and make it clear that one is going to reside in a different country. Apparently it helps when it comes to tax issues but there are drawbacks. I'm from Ontario. Any comments?
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Helen Back
- Posts: 242
- Joined: Fri Dec 28, 2012 4:16 pm
Re: Relinquishing Canadian Residency
We left in 2010. We did inform the government because of tax implications in the year we left. You don't have to tell, and it may draw the attention of the CRA. I guess it depends on your circumstances. I think we had to repay a bit of tax. I know people who had been out of Canada for five plus years without having informed CRA. They didn't have any issues when they returned. This maybe more complicated if you own a house or are generating any income in Canada.
Last edited by Helen Back on Fri Jul 06, 2018 10:09 am, edited 2 times in total.
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Helen Back
- Posts: 242
- Joined: Fri Dec 28, 2012 4:16 pm
Re: Relinquishing Canadian Residency
Residency is not your choice, by the way, it's based on your circumstances. I'm pretty sure the criteria are on line somewhere.
Response
You cant really relinquish your residency, its not like citizenship. Its a classification based on criteria, either you are resident or you are not, the choice is whether to commit the actions that meet the requirements for one set of criteria or not. The only relinquishment is whether having met the criteria for non-resident you choose to so notify the CRA. Regardless of whether you do or not, if there is an issue you will have to provide the same supporting documents whether you notified them or didnt notify them.
Re: Relinquishing Canadian Residency
Many years ago when I left Canada I telephoned Revenue Canada about residency and taxes. They told me at the time I could not leave Canada and declare myself a non-resident. They said they would determine if I was a resident based on my links to Canada. They told me about strong links (owning a house, business, car, properties, investments) and weak links (library card, memberships in organizations, clubs, etc) and advised cutting as many as possible. But they told me if I cut everything but they knew I made lots of money abroad they would definitely try to tax it.
In the last couple of years I have heard about the option of declaring non-residency when you leave. But I you have to meet the criteria. I did a quick Google but didn't find anything useful in the first few hits.
In the last couple of years I have heard about the option of declaring non-residency when you leave. But I you have to meet the criteria. I did a quick Google but didn't find anything useful in the first few hits.
Discussion
@DomeVet
I believe you answered your own question, and summed it up very well, if you make enough to interest the RCA they are going to tax it, it doesnt likely matter what you declare, etc. Its just easier to report an income to RCA thats low enough they wont care or wont bother with taxing it. If your in the ME and making CAN$100K/yr, just tell them youre making CAN$30K/yr
The RCAs "links" can be quite extreme, you have to divest yourself of all real and personal property that lies in CAN and for example you dont pay capital gains on a property you sell and resided in as your principal residence, but if youre living overseas youre not residing in it, and thus will owe taxes on any gains on the sale. This is true for other substantial properties of value whether they be additional property, business, vehicles, everything. If you dont and it becomes of interest to them if you have any link at all they will use that regardless of how weak it is to make a tax claim against you.
I believe you answered your own question, and summed it up very well, if you make enough to interest the RCA they are going to tax it, it doesnt likely matter what you declare, etc. Its just easier to report an income to RCA thats low enough they wont care or wont bother with taxing it. If your in the ME and making CAN$100K/yr, just tell them youre making CAN$30K/yr
The RCAs "links" can be quite extreme, you have to divest yourself of all real and personal property that lies in CAN and for example you dont pay capital gains on a property you sell and resided in as your principal residence, but if youre living overseas youre not residing in it, and thus will owe taxes on any gains on the sale. This is true for other substantial properties of value whether they be additional property, business, vehicles, everything. If you dont and it becomes of interest to them if you have any link at all they will use that regardless of how weak it is to make a tax claim against you.