# Travelling.... Non resident status?



## moisimplementmoi (Oct 20, 2014)

I was on the phone with my brokerage, trying to organize my accounts if i go travel for one year, and was told i was going to be considered a non-resident, and this would potentially stop me from some trading actions, and that they had to change my accounts etc. 
Has anyone ever heard such a thing? i am not taking residence anywhere else, i would just be meandering, not working, with some limited possessions in storage.... i'm going to call CRA tomorrow for more info, but now i'm worried. Last thing i want is issue in my assets.


----------



## martin15 (Feb 18, 2014)

moisimplementmoi said:


> I was on the phone with my brokerage, trying to organize my accounts if i go travel for one year, and was told i was going to be considered a non-resident, and this would potentially stop me from some trading actions, and that they had to change my accounts etc.
> Has anyone ever heard such a thing? i am not taking residence anywhere else, i would just be meandering, not working, with some limited possessions in storage.... i'm going to call CRA tomorrow for more info, but now i'm worried. Last thing i want is issue in my assets.



If you do not take residence anywhere else, you should stay as a resident of Canada for tax purposes.
Any country where you spend 183 days, you may considered as resident, even if you don't do the paperwork, so keep that in mind.
Good luck with CRA, but remember 'meandering' is not a normal situation for them, so you may need to document every move you make to them
to show you never qualified for residency anywhere else.
Keeping bank accounts and other assets in Canada should help your case for remaining as a resident.


----------



## james4beach (Nov 15, 2012)

Traveling doesn't automatically make you a non-resident. If you've got a Canadian permanent address, you're a resident (and must file taxes too). Even if you had residency in another country, _that doesn't cancel your Canadian residency_.

Do you still have a Canadian address? Or did you move out and put your things in storage. I would strongly consider using a relative's home as your residential address

Here's a more practical way to look at it. There are three entities that look at this residency thing.

1. The bank. They know whatever you tell them. They need a Canadian address and they will report all your earnings/trades to CRA. If you don't change your status with them, they will keep doing what they're already doing.
2. CRA. They need your current Canadian address. You're a resident, until you file departure taxes and say otherwise. The CRA, like any tax entity, _wants_ you to be a resident. They get to collect taxes on 'world wide income' of a tax resident.
3. The country you visit. Yes some countries will think you're a resident if you exceed a time threshold, but this only comes up if you do something that requires you to file taxes in that country, such as be employed. If you're not filing a tax return in the other country, this is a non issue

As an example, I'm in the USA for long stretches of time. To the CRA and my banks, I'm still a Canadian tax resident... I still have an address there, and I still pay Canadian taxes. Now it happens that the USA also wants to call me a resident and this only comes up because I do have to file a US tax return. But even if the US calls me a resident, this doesn't cancel Canadian residency and my obligation to file taxes there. To strength the case that I am a Canadian resident, I do keep all my bank accounts and assets in Canada and very minimal assets in USA.


----------



## indexxx (Oct 31, 2011)

The criteria for non-residency is two years absence, at least for tax purposes. I lived abroad so have been through this with my accountant. You are allowed to travel a long as you want. The thing about residency is just that- you would have to be settled someplace with an address and ties to that country, as in a local job, bank accounts, phone, utilities, car, etc. if you are maintaining ties to Canada like a mailing address or post box, paying provincial health care, Canadian driver's license, and plan to file a tax return you should be fine. I'd ask an accountant, not CRA. You really want to raise flags on yourself?


----------



## james4beach (Nov 15, 2012)

Honestly, it's pretty difficult to become a non-resident of Canada unless you _actively_ try to do this. Read this source for instance.

_
The Courts have held that 

# everyone must be resident somewhere, and 
# it is quite possible for an individual to be resident in more than one place at the same time for tax purposes. *Accordingly, where a resident of Canada goes abroad, but does not establish a permanent residence elsewhere, there is a presumption that he or she remains a resident of Canada*. Also, the fact that an individual establishes a permanent residence abroad does not, in and by itself, mean that the individual has become a non-resident of Canada. 
_

If you're vacationing in other countries, you're definitely not establishing a permanent residence anywhere. You will still be a resident of Canada. Don't confuse the CRA or your banks by telling them anything to the contrary unless you really want to go down that route.


----------



## moisimplementmoi (Oct 20, 2014)

thanks. the issue i am facing is since i would be selling my house before leaving, so no fixed address. Everything i read from CRA actually clearly imply that i will still have resident status (and i expect to not go more than 12-24 months) it's the bank bureaucracy who wants to declare me de facto non-resident, for example unable to purchase additional mutual funds, changing my RRSP status. 

Many of my issues stem from the lack of a physical mailing address. Maybe i was naive to think that having CRA state i was a resident would settle the situation. At one point TDDI was telling me i would also have to provide them on a continuous basis an address where they can contact me in case they had to send shareholder special information, it seems they have never heard of e-mail. It seems for them the concept of resident without a residence is foreign... 

the other routes also have issues, since the other addresses i can use to say i moved to in Canada, ie parents, affect my provincial status.

thanks again.... i'll try and see if i can rent a physical address in toronto, just to keep them happy....


----------



## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... 3. The country you visit.
> Yes some countries will think you're a resident if you exceed a time threshold, but this only comes up if you do something that requires you to file taxes in that country, such as be employed. If you're not filing a tax return in the other country, this is a non issue


This will vary by country and should be checked out in advance, should it not?

For example - my understanding is that the IRS says that where one has met the "Substantive Presence Test", one will be considered a resident alien and are generally taxed on one's worldwide income, the same as an American - including having to file a US tax return. Fortunately, a "closer connection exemption" can be applied for. 
http://www.irs.gov/Individuals/International-Taxpayers/Determining-Alien-Tax-Status
http://www.irs.gov/Individuals/International-Taxpayers/Taxation-of-Resident-Aliens
http://www.irs.gov/Individuals/International-Taxpayers/Substantial-Presence-Test

If doing something that requires filing a tax return (ex. earn income) is required - why does the Snowbird Association recommend snow birds file for the "closer connection exemption" on a yearly basis? 

Or are you saying the Snow Bird Association expects that all snow birds are earning income in the US?


Cheers


----------



## Eclectic12 (Oct 20, 2010)

moisimplementmoi said:


> ... Everything i read from CRA actually clearly imply that i will still have resident status (and i expect to not go more than 12-24 months) ....


For the 12-24 months ... is this consecutive? 
If so, have you figured out what happens with your provincial health care plan?

It looks like Ontario is expecting one to be in Canada for 153 days of any twelve month period to maintain OHIP coverage.
They do have extended absence provisions but travel does not seem to be one of them.
http://www.health.gov.on.ca/en/public/publications/ohip/travel.aspx


Cheers


----------



## moisimplementmoi (Oct 20, 2014)

Eclectic12 said:


> For the 12-24 months ... is this consecutive?
> If so, have you figured out what happens with your provincial health care plan?
> 
> It looks like Ontario is expecting one to be in Canada for 153 days of any twelve month period to maintain OHIP coverage.
> ...


I would lose it. Actually travel is an allowable extended absence, under the "Any reasons" category, but i have already used both my one year allowance. So i'm getting private emergency health coverage. currently getting some quotes... actually interesting that the few offerings end up being more flexible in regards to "dangerous" activity exclusions... but it adds up


----------



## indexxx (Oct 31, 2011)

james4beach said:


> Honestly, it's pretty difficult to become a non-resident of Canada unless you _actively_ try to do this. Read this source for instance.
> 
> _
> The Courts have held that
> ...


Just for interest's sake, a few years ago I was legally a non-resident of any country for a nine month period. When I was living in the Caymans, I became a non-resident of Canada for tax purposes, having satisfied the two-year requirement. When I left the Caymans, as soon as I quit my job there I became a non-resident of that country also- only those with an active work permit are considered residents. I left the island to travel in Europe for nine months, (hoping to find a way to stay there and supporting myself as a street musician as I traveled- amazing time...) and during that period I was not a legal resident of any country. I was of course still a citizen of Canada.


----------



## james4beach (Nov 15, 2012)

Eclectic12 said:


> This will vary by country and should be checked out in advance, should it not?
> 
> For example - my understanding is that the IRS says that where one has met the "Substantive Presence Test", one will be considered a resident alien and are generally taxed on one's worldwide income, the same as an American - including having to file a US tax return.


Sorry yes, with the USA you're right. Previously the two governments had no way to know exactly how many days we spent in each country.

With recent changes, this is now automatically tracked whenever we exit and enter the border. Now the USA has the data to automatically learn exactly how many days you spend in the USA which is why travelers to the USA have to be extremely careful.

(Aside, public service announcement: if you're a Canadian who spends too many days in the US, not just in one year but over three years, the US government may automatically determine you are a resident and therefore you are required to disclose all of your bank and investment accounts to the US ... penalty for failing to do so is up to $10,000 per violation)


----------



## moisimplementmoi (Oct 20, 2014)

indexxx said:


> Just for interest's sake, a few years ago I was legally a non-resident of any country for a nine month period. When I was living in the Caymans, I became a non-resident of Canada for tax purposes, having satisfied the two-year requirement. When I left the Caymans, as soon as I quit my job there I became a non-resident of that country also- only those with an active work permit are considered residents. I left the island to travel in Europe for nine months, (hoping to find a way to stay there and supporting myself as a street musician as I traveled- amazing time...) and during that period I was not a legal resident of any country. I was of course still a citizen of Canada.


thanks. that's interesting. can i ask what you did address wise to go around banking regulations?


----------



## Eclectic12 (Oct 20, 2010)

james4beach said:


> ... (Aside, public service announcement: if you're a Canadian who spends too many days in the US, not just in one year but over three years, the US government may automatically determine you are a resident and therefore you are required to disclose all of your bank and investment accounts to the US ... penalty for failing to do so is up to $10,000 per violation)


With people not being used to tracking as closely (or having bad memories) - this is likely why groups like CARP & the Snowbirds Association recommend filing yearly for the "Closer Connection Exemption". Beyond the time to file it, I don't believe there's any down side.

If the automatic bank reporting is the same as my Canadian co-workers with US spouses or dual citizens ... it's reportedly a pain as the US wants the highest balance for each account, not the end of the month closing balance. All the more reason to avoid such a situation, where one can.


Cheers


----------



## indexxx (Oct 31, 2011)

moisimplementmoi said:


> thanks. that's interesting. can i ask what you did address wise to go around banking regulations?


How do you mean? Can you elaborate on the question- what regulations are you referring to? Do you mean while I was living in Cayman or while I was travelling? In Cayman there was nothing to 'get around'- once I had been a foreign resident for two consecutive years and satisfied the requirements of non-residency in Canada, that was it. No fuss, no muss, five years of tax-free earnings. I had a bank account in Cayman when I lived there and also a Cayman pension in a financial institution. I did however maintain a bank account in Canada- that was my only tie here. I did this because I went to Cayman with a bit of debt and told my bank I needed to leave it open in order to wire money back to service the debt. When I left the islands to go to Europe I still had my Canadian bank account and credit card, so I used that plus my earnings as a busker to fund my nine months on the road.


----------



## moisimplementmoi (Oct 20, 2014)

indexxx said:


> How do you mean? Can you elaborate on the question- what regulations are you referring to? Do you mean while I was living in Cayman or while I was travelling? In Cayman there was nothing to 'get around'- once I had been a foreign resident for two consecutive years and satisfied the requirements of non-residency in Canada, that was it. No fuss, no muss, five years of tax-free earnings. I had a bank account in Cayman when I lived there and also a Cayman pension in a financial institution. I did however maintain a bank account in Canada- that was my only tie here. I did this because I went to Cayman with a bit of debt and told my bank I needed to leave it open in order to wire money back to service the debt. When I left the islands to go to Europe I still had my Canadian bank account and credit card, so I used that plus my earnings as a busker to fund my nine months on the road.


TD and TDDI insist i must have a fixed address, and this is part of regulations. I guess you were able to provide them with a Cayman address so that probably helps. My fear are if i use a friends address as a moving place, would CRA consider this as living together? and if i use family addresses they are all out of province, and i really don't want to be considered a Quebec resident. 
at this point i feel i would move to a postal box, using "Suite XXX" in the address, but from prior experience i am really weary of getting accounts frozen


----------



## indexxx (Oct 31, 2011)

moisimplementmoi said:


> TD and TDDI insist i must have a fixed address, and this is part of regulations. I guess you were able to provide them with a Cayman address so that probably helps. My fear are if i use a friends address as a moving place, would CRA consider this as living together? and if i use family addresses they are all out of province, and i really don't want to be considered a Quebec resident.
> at this point i feel i would move to a postal box, using "Suite XXX" in the address, but from prior experience i am really weary of getting accounts frozen


The thing to remember with stuff like this is that banks etc really do not like nor understand this kind of behaviour- they expect that everyone works 50 sees a year and takes two weeks off to lie on a beach; they view anything else as unconventional and risky. The trick is not too give them too much information or they get antsy; I would use your friend's address, simply call your bank to give them a simple change of address or do it yourself online. 

CRA doesn't care what address you use unless YOU choose to claim common-law. No rules against two people living together as roommates, right? Or don't even tell the banks anything, leave your address as it is, and simply get the mail forwarded by Canada Post. You can also get your mail held but probably for that length of time there would be a few important things you'd want your friend to open for you.


----------



## moisimplementmoi (Oct 20, 2014)

indexxx said:


> The thing to remember with stuff like this is that banks etc really do not like nor understand this kind of behaviour- they expect that everyone works 50 sees a year and takes two weeks off to lie on a beach; they view anything else as unconventional and risky. The trick is not too give them too much information or they get antsy; I would use your friend's address, simply call your bank to give them a simple change of address or do it yourself online.
> 
> CRA doesn't care what address you use unless YOU choose to claim common-law. No rules against two people living together as roommates, right? Or don't even tell the banks anything, leave your address as it is, and simply get the mail forwarded by Canada Post. You can also get your mail held but probably for that length of time there would be a few important things you'd want your friend to open for you.


Thanks. i guess i was being overcareful and trying to tell them too much, to avoid any surprise later (last time one mailing got returned to sender, and accounts all froze, and BNC at time wouldn't unfreeze it.. stuck in Uganda with no access to money was not fun).. it is incredible how the world is so stuck in old way...even the refusal to contact by email... 

...so i'll "move in" with a friend.... other option is mail post place (using Suite xxx), will collect mail, and ship once a month to my sister for $5+postage.... this option has advantage that i can easily continue it when i come back, if i don't want a permanent place for a while.... 

thanks


----------



## indexxx (Oct 31, 2011)

moisimplementmoi said:


> Thanks. i guess i was being overcareful and trying to tell them too much, to avoid any surprise later (last time one mailing got returned to sender, and accounts all froze, and BNC at time wouldn't unfreeze it.. stuck in Uganda with no access to money was not fun).. it is incredible how the world is so stuck in old way...even the refusal to contact by email...
> 
> ...so i'll "move in" with a friend.... other option is mail post place (using Suite xxx), will collect mail, and ship once a month to my sister for $5+postage.... this option has advantage that i can easily continue it when i come back, if i don't want a permanent place for a while....
> 
> thanks


You're very welcome. I've spent over two and half years of my life in total backpacking for long periods in different places, plus my 5 years living in Cayman, so Ive dealt with all of this. What I would do is deal with two banks, and have both a credit and debit card from each. That way if something gets frozen or compromised/hacked while travelling, you can rely on the other one to get funds. I always keep a few hundred US dollars in my money belt also as an emergency fund that I never touch. (the one time I DO believe in an emergency fund!). Then have your friend open any important-looking banking info that arrives in the mail so you can deal with it while on the road. 

You don't mention where you're going but MEC sells a nice little RFD card protectors and wallets to prevent high-tech identity theft. There are people walking around in some countries with scanners that can read the chip on your card through a normal wallet and steal the info. I also sometimes make a 'decoy' money pouch if in dangerous places. My real 'bank' is around my waist under my clothes on a money belt, but I take a neck pouch, put an old expired passport in it with a few small bills, and if someone wanted to rob me, I'd throw it at them and run the other way. They think they've already got your passport and some money so won't risk giving chase.


----------



## james4beach (Nov 15, 2012)

> If the automatic bank reporting is the same as my Canadian co-workers with US spouses or dual citizens ... it's reportedly a pain as the US wants the highest balance for each account, not the end of the month closing balance. All the more reason to avoid such a situation, where one can.


Yes you must report the highest balance of all accounts to the IRS. They are ramping up enforcement of this.

Wow, MEC sells tin-foil sleeves to block RF cards? (paypass, pay wave etc). That's fantastic, I want one! This kind of theft happens in the Americas too, all the bad guy has to do is brush an antenna near your pocket for a few seconds to steal your money.


----------



## moisimplementmoi (Oct 20, 2014)

indexxx said:


> You're very welcome. I've spent over two and half years of my life in total backpacking for long periods in different places, plus my 5 years living in Cayman, so Ive dealt with all of this. What I would do is deal with two banks, and have both a credit and debit card from each. That way if something gets frozen or compromised/hacked while travelling, you can rely on the other one to get funds. I always keep a few hundred US dollars in my money belt also as an emergency fund that I never touch. (the one time I DO believe in an emergency fund!). Then have your friend open any important-looking banking info that arrives in the mail so you can deal with it while on the road.
> 
> You don't mention where you're going but MEC sells a nice little RFD card protectors and wallets to prevent high-tech identity theft. There are people walking around in some countries with scanners that can read the chip on your card through a normal wallet and steal the info. I also sometimes make a 'decoy' money pouch if in dangerous places. My real 'bank' is around my waist under my clothes on a money belt, but I take a neck pouch, put an old expired passport in it with a few small bills, and if someone wanted to rob me, I'd throw it at them and run the other way. They think they've already got your passport and some money so won't risk giving chase.



thanks....never thought about the old passport... good idea... yeah i have the fakeout stuff.... including canadian tire money... i'll check the MEC protector... 
not even sure where i would be going, just know i have to hit the trail..


----------



## indexxx (Oct 31, 2011)

james4beach said:


> Yes you must report the highest balance of all accounts to the IRS. They are ramping up enforcement of this.
> 
> Wow, MEC sells tin-foil sleeves to block RF cards? (paypass, pay wave etc). That's fantastic, I want one! This kind of theft happens in the Americas too, all the bad guy has to do is brush an antenna near your pocket for a few seconds to steal your money.


Well, a bit nicer than tinfoil. For $5-6 I think it's worth it. 
http://www.mec.ca/shop/?q=rfid
I also use a cut-proof camera strap and carry PacSafe in case I need to leave my pack somewhere like in a hostel. Folds down to almost nothing in your bag. http://www.mec.ca/product/4011-299/pacsafe-backpack-and-bag-protector/?q=pacsafe

As well as a waist wallet with my passport and cards, I also use an actual 'money' belt that can hide cash inside itself.
http://www.mec.ca/product/5031-300/pacsafe-cashsafe-anti-theft-travel-belt-wallet/?q=pacsafe

I've done a lot of hardcore travel in sketchy areas and I've been lucky to have never lost anything (knocks on wooden head) :stupid:


----------



## moisimplementmoi (Oct 20, 2014)

thanks everyone. now we will see if i can fund this plan, house goes for sale next week...


----------



## Allan Madan (Jan 23, 2015)

You will remain a resident of Canada as long as you maintain your primary ties. 
If you have a place of dwelling, spouse and/or dependents in Canada you have primary ties with Canada. 

Sincerely, 
http://www.madanca.com
Madan Chartered Accountant


----------



## OhGreatGuru (May 24, 2009)

moisimplementmoi said:


> I was on the phone with my brokerage, trying to organize my accounts if i go travel for one year, and was told i was going to be considered a non-resident, and this would potentially stop me from some trading actions, and that they had to change my accounts etc. ...


From other posts on similar subject, I believe there are 2 separate (but possibly related) issues here for the brokerage. One is your residency status from CRA's point of view. This has been commented on extensively. If you are going to remain a "deemed resident" from CRA's point of view, then brokerage can treat you as a Canadian resident, and just needs a mail drop to send your tax slips to. 

But there may be a 2nd issue. The brokerage may not be authorized/licensed to conduct trading for non-residents. And for this purpsoe they may not be using the same definition of residency as CRA. You need to clarify this with your brokerage.


----------

