In the last article in this Blog, I predicted that, “After the July 18, 2017 release from the Ministry of Finance, many affluent and successful Canadians will start to seriously consider finding a more hospitable place to reside.” Feedback from my contacts suggest that my prediction was quite accurate. The purpose of this article is… Continue Reading
Category Archives: Nonresident taxation
A TAX GUIDE FOR AFFLUENT CANADIANS HEADING FOR THE EXIT-PART 1
After the July 18, 2017 release from the Ministry of Finance, many affluent and successful Canadians will start to seriously consider finding a more hospitable place to reside. First it was an additional 4% in personal income taxes. That was a little present from Justin Trudeau’s government shortly after he took office. Now, there is… Continue Reading
INTERNATIONAL TAX ASPECTS OF CANADIAN TAX PROPOSALS RE PRIVATE CORPORATIONS
On July 18, 2017, Canada’s Finance Minister Bill Morneau released a document entitled Next Steps in Improving Fairness in the Tax System by Closing Loopholes and Addressing Tax Planning Strategies. This was no surprise-the Minister had hinted at this some months ago at a tax conference. In a nutshell, the Minister, and his many left-leaning… Continue Reading
CANADIANS MOVING TO U.S. WITH CANCOS SHOULD CONSIDER “S CORP. BAILOUT”
Many Canadians who move to the U.S. are the sole shareholders of a Canadian corporation (“Canco”) that is either used for investment purposes, or which has substantial retained earnings generated from an active business. In such cases, they will generally face a Canadian tax hit when they leave (“departure tax”) in the form of a… Continue Reading
CANADIAN EXPATS CAN RECEIVE SALARIES FROM CANADA TAX FREE
Often, a Canadian expat will continue to receive salary payments from a Canadian corporation (“Canco”) after he or she ceases to be a Canadian resident for tax purposes. This can apply to a situation where the sole shareholder of Canco emigrates and still continues to operate Canco. It can also apply to a situation where… Continue Reading
WEALTHY IMMIGRANTS TO CANADA SHOULD CONSIDER FOREIGN OWNERSHIP OF CANCOS
Many wealthy (as well as not so wealthy) immigrants to Canada will establish very successful Canadian corporations (“Cancos”) that will ultimately become extremely valuable. In many cases, those immigrants to Canada will still have family abroad, and might be happy to have equity interests in Canco owned by those family members. In such cases, there… Continue Reading
NEW TAX TREATY BETWEEN CANADA AND ISRAEL CLOSES LITTLE-KNOWN LOOPHOLE
On September 23, 2016, I got an email from the Ministry of Finance announcing a new tax treaty between Canada and Israel. The actual posting on the Ministry’s website contained the following statement: “A new Convention between the Government of Canada and the Government of the State of Israel for the Avoidance of Double Taxation… Continue Reading
CANADIAN TAX ISSUES WHEN EXPATS SELL THEIR FORMER RESIDENCE
It is not uncommon for former Canadian residents to retain and rent their personal residence when they emigrate, rather than selling it before they leave. As long as the property is rented on an arm’s length basis under terms that do not allow the expat to reoccupy on short notice, the retention of this property… Continue Reading
NON-RESIDENTS INVESTING IN CANADIAN REAL ESTATE CAN CUT TAXES ON CAPITAL GAINS BY PROPER USE OF FORCO
In this troubled, chaotic world we are living in, Canada remains a politically and financially stable locale that is an attractive destination for foreign investment. I have little doubt that, in the years ahead, investment in Canadian real estate by non-residents will continue to be quite substantial. Over the years, I have found that most… Continue Reading
CANADIAN TAX ISSUES WITH ALIMONY PAYMENTS TO AND FROM NON-RESIDENTS
Under the Income Tax Act (“the Act”) alimony[1] paid by a separated or divorced spouse will generally be deductible in computing income of a Canadian resident. This assumes that it is paid pursuant to a written agreement or court order, and paid as an “allowance” on a periodic basis. Similarly, a Canadian resident recipient of… Continue Reading