In the last article in this Blog, I provided an overview of how Canada’s tax treaties can help a Canadian seeking to become a non-resident, particularly in the wake of the July 18, 2017 release from the Ministry of Finance. Canada currently has tax treaties in force with 93 countries in various parts of the… Continue Reading
Author Archives: Michael Atlas
A TAX GUIDE FOR AFFLUENT CANADIANS HEADING FOR THE EXIT-PART 2
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
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 T1135 REPORTING FOR PART YEAR RESIDENTS
As a general rule, Canadian residents need to file form T1135 with the CRA for any year in which the total “cost amount” of “specified foreign property” exceeds $100,000 at any time in that year[1]. Depending on the circumstances, this form requires various levels of information to be reported with respect to transactions in connection… 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
TRUMP CORPORATE TAX CUTS COULD TRIGGER CANADIAN TAX ON DIVIDENDS FROM U.S. SUBS
Shhhh! There is a dirty little secret that not many people know or talk about. A large percentage of U.S. subsidiaries (“Usco”) of Canadian companies (“Canco”) are actually resident in Canada based on traditional rules for determination corporate residency that are mainly derived from UK tax cases. This is because their “central management and control”… 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
HOW CANADIAN COMPANIES CAN USE EXEMPT SURPLUS TO REDUCE TAXABLE GAINS ON SALE OF FOREIGN SUBSIDIARIES
Envision the following situation: Canco, a private corporate based in Ontario, has just gotten an offer to buy its wholly-owned U.S. subsidiary (“Usco”) for $10 million US. This is far more that the management of Canco thought it was really worth, so they jump at the offer. They ask Joe Numbers, their VP Finance to… Continue Reading