Because the distinction between a tax resident and non-resident isn’t always clear, if you’re planning a move to the United States or overseas, we strongly recommend you consult one of our tax advisors before your departure date for work or relocation purposes. The impact of this determination is significant. Know that for residency purposes TAX and IMMIGRATION status aren’t necessarily the same thing.
Remaining a Resident of Canada while working and temporarily living abroad
Canadian residents must report their worldwide income no matter where it is earned. For example, if you are a tax resident of Canada, your US rental property income must be reported on your tax return (regardless of whether cash flow positive or not) or the income from your UK based (tax advantaged) savings plan may be taxed in Canada or you would need to ensure you plan accordingly for the tax liability in Canada on your wages from your 8 week on, 4 weeks off rotation in Qatar.
Our team can help you understand the Canadian taxation of your foreign income as a Canadian tax resident and assist you to prepare accordingly.
“Becoming” a non-resident of Canada:
- Canadians leaving the country and intending to sever their tax residency are subject to a departure tax. This is applied to any unrealized gains on investments held outside registered plans—but does not apply to Canadian real estate or RRSPs.
- If you retain some of your Canadian assets such as but not limited to a rental property in Canada or business or partnership interests may result in a requirement to file an Annual Canadian Tax Return among other annual disclosures and pay tax in Canada.
- We can help you determine whether you’ll maintain your Canadian tax residency and the process you’ll need to follow if you choose to sever your ties—and what that will mean for your tax returns and compliance moving forward.
We can ensure you meet all of your personal tax obligations in your year of departure and subsequent years.