# Financial to-dos for Emigrants



## CanadianCapitalist (Mar 31, 2009)

A friend of mine is emigrating out of Canada with no firm plans to return. He was asking me about what to do with his bank accounts and RRSPs here in Canada. Ideally, he would prefer to keep a portion of his accounts here in Canada. One reason is tax planning. If he withdraws the entire balance out of his RRSP, he'll be incurring a tax hit that he'd like to avoid if he can.

I realize this is a specialized topic and my friend should hire professional advice but I thought I'd ask this here anyway in case any of you have dealt with this in the past. Any pointers to books / resources would be helpful as well. Thanks.


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## MoneyGal (Apr 24, 2009)

Complicated topic and I am running off to the gym but here is a very quick answer: if he maintains ties to Canada (and bank accounts and RRSPs here are very much ties to Canada for CRA purposes) he may well be a _deemed tax resident of Canada_ (notwithstanding his actual residence in another country). 

Being a deemed tax resident of Canada usually means that (1) he would need to file a Canadian tax return and (2) he would need to pay CANADIAN taxes on his WORLDWIDE income. 

If there is a tax treaty between Canada and whatever country he is emigrating to, the Canadian taxes will be coordinated with the taxes in his new home country. If there is no tax treaty, he may be liable for full taxation in BOTH countries. 

He should be crystal clear about the likely implications of his decisions before he emigrates. If he wants to maintain his RRSPs (for example) to avoid a single year of high taxation - that cost of that single year may pale when compared to being a deemed tax resident and paying taxes in two countries. (Plus the general complexity of having to file in two countries.) 

NB: This is an extremely generic and general answer.


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## marina628 (Dec 14, 2010)

My friend moved to Cayman Islands thinking he was not having to pay any Canadian taxes as soon as he moved.He was advised to sell all property here and close his bank accounts.He was holding on to a house in Oakville ,getting rent and did not file any canadian taxes but his tenants did file ,he got assessed for 3 years and fined late penalty.


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## Karen (Jul 24, 2010)

You didn't say which country your friend is emigrating to, but if it happens to be the US, I recommend a book called "The Canadian in America: Real-Life Tax and Financial Insights into Moving and Living in the U.S." by Brian D. Wruk.


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## CanadianCapitalist (Mar 31, 2009)

Karen said:


> You didn't say which country your friend is emigrating to, but if it happens to be the US, I recommend a book called "The Canadian in America: Real-Life Tax and Financial Insights into Moving and Living in the U.S." by Brian D. Wruk.


Thanks for your replies. My friend is emigrating to India. I've already suggested that he should seek out specialized advice but all your replies helps. I also found a ton of material on the CRA website here:

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html#d


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## OhGreatGuru (May 24, 2009)

The rules for "non-residency" are rather complex. But I believe if your only residential tie was an existing RRSP, you would still be deemed a non-resident. Any future withdrawals are subject to Part X111 withholding tax, but you wouldn't then have to start paying CDN tax on all your foreign income. There is no requirement to collapse an RRSP if you move abroad.


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## I'm Howard (Oct 13, 2010)

My Son is Non Residant, and prior to moving closed all accounts in Canada, has not even renewed his Driver's License.

Visits to Canada, He is insured for Health Care through a company in the U.K, He is a Foreigner.

I am concerned about his future needs for Pensions and have set up TFSA's in our names, Estate will receive proceeds on our Deaths, they will be part of his inheritance.

A Future Inheritance will be invested in his name, I will pay taxes to Canada as they are due, I don't trust Offshore Havens.


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## kcowan (Jul 1, 2010)

marina628 said:


> My friend moved to Cayman Islands thinking he was not having to pay any Canadian taxes as soon as he moved.He was advised to sell all property here and close his bank accounts.He was holding on to a house in Oakville ,getting rent and did not file any canadian taxes but his tenants did file ,he got assessed for 3 years and fined late penalty.


Yes the CRA errs on the side of yes you are rather than no you're not a resident. Maintaining an RRSP really needs an advanced ruling IMHO.


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## GeniusBoy27 (Jun 11, 2010)

I looked into this when I moved to the US and was advised by a tax specialist that I'd have to sever all ties (including my RRSPs), to make it clear that I'm no longer a resident of Canada. Since I had an intention to eventually return, I opted not to sever the ties.


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## movingon (Jan 17, 2011)

*Emmigrating to Italy*

I am a Canadian citizen planning on emigrating to Italy shortly. I will be living with my Italian husband and I will not be working. My intention is to stay a Canadian resident, since I have credit cards, bank accounts, a driver's license, RRSP's, and a Canadian passport. As far as I know, I will pay my Canadian taxes solely on my income from my pensions.

Currently I receive CPP and in a couple of years, my OAS.

What I would like to know is the following: do I need to maintain a Canadian address for the CRA; for Canadian credit cards such as Visa; for bank accounts; driver's license, and anything else.

Further, if eligible, am I allowed to receive CPP, OAS AND an Italian pension, or can I only receive my Canadian pensions.


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## MoneyGal (Apr 24, 2009)

You do not need to maintain a Canadian mailing address for the CRA. You can arrange to have direct deposit into a Canadian bank account or, if it is available, into your bank account in Italy. 

You are eligible for full OAS (depending on your income) if you have lived in Canada for more than 20 years after the age of 18. 

You can get OAS, CPP and an Italian pension. Only OAS may be affected at the source (that is, reduced at source) depending on the amount of your other income. 

I don't know the answers to your questions about maintaining a Canadian mailing address for your driver's license etc. Most of your OAS questions are answered here, on this Government of Canada web site, "Receiving your OAS Pension:" 

http://www.servicecanada.gc.ca/eng/isp/pub/oas/oas.shtml#four


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## GeniusBoy27 (Jun 11, 2010)

I would look into the Italian pensions, as I thought there was a work/residency requirement to get an Italian pension.


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## OhGreatGuru (May 24, 2009)

MoneyGal said:


> You are eligible *for full OAS* (depending on your income) if you have lived in Canada for more than 20 years after the age of 18.


No, not quite. You have to have lived in Canada for 20 years after age 18 to be eligible for any OAS payment (to emigrants), but the amount of the OAS payment will be prorated if you have lived here less than 40 years after age 18. http://www.servicecanada.gc.ca/eng/isp/pub/oas/oas.shtml#one

PS: Sorry MoneyGal, I just re-read Movingon's post and in her circumstances it is likely she is eligible for full OAS, which is presumably what you based your comment on.


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## MoneyGal (Apr 24, 2009)

No worries...I was typing quickly and could have been clearer.


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