QUESTION: Hello
I found your website and was hoping that you would be able to
help me with a couple of questions.
I am planning on moving to Australia with my spouse on a Employer
sponsored visa in the spring. We own a condo in Vancouver and I
was wondering if we would have to sell it in order to not pay
taxes in Canada. Also, what other steps we would need to follow?
Such as , could we keep a canadian bank account?
Thanks for your time.
Regards
---------------------------------------------
david ingram replies:
You may keep your house if you rent it to a stranger for a lease
of a year or more so that it is not "available" to you.
You may leave your RRSP accounts here.
You may have a securities or bank account as long as they are
shown as NON-RESIDENT accounts and your Australian address is
used on them (after all, you live in Australia, not at your
mother's or brother's or friend's house in Canada.
Read Article IV(3)(a) of the Canada Australian Tax Treaty as
follows: (you can find the whole treaty at:
http://www.fin.gc.ca/treaties/austral2e.html)
Article 4
Residence
1. Subject to paragraph 2, for the purposes of this Convention, a
person is a resident of a Contracting State if that person is a
resident of that State for the purposes of its tax. A Contracting
State or any political subdivision or local authority thereof or
any agency or instrumentality of any such State, subdivision or
authority is also a resident of that State for the purposes of
this Convention.
2. A person is not a resident of a Contracting State for the
purposes of this Convention if the person is liable to tax in
that State in respect only of income from sources in that State.
3. Where by reason of the provisions of paragraph 1 an individual
is a resident of both Contracting States, then his status shall
be determined in accordance with the following rules:
a) he shall be deemed to be a resident solely of the Contracting
State in which he has a permanent home available to him;
b) if he has a permanent home available to him in both
Contracting States, or if he does not have a permanent home
available to him in either of them, he shall be deemed to be a
resident solely of the Contracting State with which his personal
and economic relations are the closer.
4. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both Contracting
States, then the person's status shall be determined as follows:
a) it shall be deemed to be a resident of the Contracting State
in which it is incorporated or otherwise constituted;
b) if it is not incorporated or otherwise constituted in either
of the Contracting States, it shall be deemed to be a resident of
the Contracting State in which its place of effective management
is situated.
---------------------------------
As you can see from 3(a), if you have a house (rented or owned)
available in Australia, and none in Canada (it was rented
remember) you are not taxable in Canada as a rule.
--------------------------------
David Ingram's US / Canada Services
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