Financial Perspective – Thinking of leaving Canada for good?
An overview of financial issues to take into account.
According to the Government of Canada, about three million Canadians live in other countries. Most of them are there to go to school, work or spend a few months of the year when retired, while remaining Canadian citizens.
But others have chosen to move for good and become permanent residents – or even citizens – of another country. At that point, they have to take a number of factors into account, especially when it comes to taxes, which is why professional advice is strongly recommended for anyone thinking of making this kind of change.
That said, here is an overview of the ground rules.
What is a Canadian non-resident?
For tax purposes, you would generally be considered a non-resident if you have severed all residential ties with Canada. The principle is quite simple, as shown in the table below, but it’s important to know that the government takes many factors into consideration before determining your status.
These include whether you continue to own or rent a home in Canada, where your spouse and dependents live, the economic and social ties you maintain with Canada (your job, financial accounts, sports and social activities); your personal property in Canada (furniture, clothing, vehicle, etc.); and any other link such as your health insurance or driver’s licence.
In other words, to become a non-resident of Canada, you must really cut your ties. If you don’t, the government might instead consider you to be a dual resident, de facto resident or deemed resident, with each status having different tax implications…