Pretend you are a young and single Canadian who has had a really fantastic year at his or her job on Bay Street. The year is almost over, and you know you are in line to get a seven figure bonus at the beginning of next year. You think to yourself that you could easily… Continue Reading
Category Archives: Emigration
TAX ISSUES FOR CANADIAN EXPATS WITH OFFSHORE TRUSTS
As a general rule, if a Canadian resident (“the contributor”) contributes property to a trust that would otherwise be non-resident (“NRT”), the trust will be a deemed resident trust (“DRT”). A DRT is subject to an extremely complex set-of rules in the Income Tax Act (“the Act”) generally found in section 94. As outlined in… Continue Reading
TAX CONSIDERATIONS WHEN CORPORATIONS RESIDENT IN CANADA BECOME NONRESIDENT
It is relatively difficult for a corporation that is resident in Canada (“Canco”) to become a nonresident. This is because of the fact that, if Canco was incorporated in Canada, it will be deemed, under the Income Tax Act (“the Act”) to remain resident in Canada, even if its “central management and control” (“CMC”) is… Continue Reading
DECISION IN CONRAD BLACK TAX CASE SHOWS “FLIP SIDE” OF ANTI-AVOIDANCE RULE FOR CANADIAN EMIGRANTS
Many tax practitioners were quite surprised by the decision of the Federal Court of Appeal (Black vs. Canada-2014 FCA 275) and the previous decision of the Tax Court of Canada, both in 2014, regarding Lord Conrad Black. On the face of it, I think most people were shocked by the notion that a Canadian expat who… Continue Reading
HOW CANADIAN “STARTUP” ENTREPRENEURS CAN USE A CROSS-BORDER STRATEGY TO ELIMINATE TAX ON CAPITAL GAINS
It is hard these days to pick-up the pages of a business magazine or the financial pages of a newspaper without reading something about “startups”. Either there will be advice for people involved with startups, or stories about some nerd, still in his 20’s, who became a gazillionaire (at least on paper) when his startup… Continue Reading
EIGHT (8) MYTHS REGARDING BEING NON-RESIDENT FOR CANADIAN TAX PURPOSES
Over the years, I have advised hundreds of people, including many accountants and lawyers, regarding Canadian tax residency issues for individuals. I am frequently amazed at how little they know about this critically important area, and the misconceptions that many of them have. Below are what I have found to be the eight (8) most… Continue Reading
GOING NON-RESIDENT BEFORE GETTING A “GOLDEN HANDSHAKE” CAN SAVE BIG MONEY IN TAX FOR A CANADIAN!
If a highly paid executive will be getting a substantial severance payment (which, for the purposes of this posting, could include damages for wrongful employment; a negotiated severance payment; or one provided in the employment contract), moving to a sunny tax-haven can cut the tax bite by more than half! With increased tax rates starting… Continue Reading
THE GUARANTEED, NO-FAIL, RECIPE FOR A CANADIAN TO BECOME A NON-RESIDENT FOR TAX PURPOSES
With increased personal income tax rates coming into effect this year on taxable income over $200,000 per year, I feel confident in predicting that more and more Canadian resident individuals will seriously think about the possibility of becoming non-residents. Fortunately, in this country, unlike our neighbor to the South, we only have to worry about shedding… Continue Reading
THE BASICS OF CANADIAN “DEPARTURE TAX”
When an individual, who was resident in Canada for tax purposes, ceases to be resident in Canada, there is generally a deemed disposition of assets owned by that individual at their fair market value. Any resulting deemed gain must be reported on the final tax return filed as a resident. This is commonly called “departure… Continue Reading
CAN A CANADIAN “PERMANENT TRAVELER” (“PT”) BE A NON-RESIDENT?
The question of whether or not a person is “resident in Canada” (which includes a person who is “ordinarily resident”) is undoubtedly the most pivotal issue under the Income Tax Act[1]. If the answer is “yes”, the person will generally be subject to Canadian tax on all worldwide income[2]; if the answer is “no”, then… Continue Reading