Cutting the Residency (Ontario) ties.

[Darb]

I've followed the Forum for a while but haven't seen any discussions related to such shorebound matters as to how to best manage government (or other?) Health Plan coverage eligibility, or other 'residency issues' that may arise for someone planning a longer, out-of-country cruise. I'm from Ontario Canada and Provincial Health Plan eligibility is one thing that I need to consider. I'd love to hear from anyone that has already navigated their way through these waters?

[travellerw]

We are from Alberta and currently in the process of doing this.

There really is no magic bullet or formula. Do the research and find out what you will need to do and when (i.e. File taxes, ect). For us, we have accepted the fact that we will loose our health care as we plan to be gone WAY past the grace period.

My biggest concern is an audit. I'm worried that going from a reported income to a very low income will raise some flags with Mr. Harper!

[Darb]

It sounds like you are assembling a plan for your getaway 'travellerw'. I am told that there are some provinces that have a shorter re-instatement period than others to become eligible once you return from away. I've heard, anecdotely that folks from one province have returned to another simply because the period to re-qualify there was shorter than in their home province.

What is the 'grace period' to retain health care in Alberta. I believe that in Ontario, someone can be out of country for up to 7 months and not affect their status, and that they can request up to a single (lifetime?) continuous 2 year absence and still retain their coverage.

I assume tax filing must still follow the normal rules. Like you I will move to a lower retirement income but hopefully that will not seem unusual to Revenue Canada. But I don't know if there are any special rules where out of country residency is concerned, especially where one has no fixed address.

[Vasco]

As an Ontario resident you may be out of the province for 212 days in a 12 month period as long as your residence is in Ontario. You may also be eligible for OHIP if you're away "on vacation" for up to two years. All the info is online.
Longer Absences from Ontario - When can OHIP cover you? - Ontario Health Insurance (OHIP) - Publications - Public Information - MOHLTC

[travellerw]

The official Alberta rules state that you loose your coverage if you are away for more than 183 days in a 12 month period. You can officially request a 2 year extension for a sabatical. There is now a conflicting rule for snowbirds that states you can be away for 212 days in a 12 month period, but it must be reoccuring. Not sure how they would prove that for the first year a snowbird goes!

The crazy thing. There is no wait period in Alberta upon return if you prove intention to stay and residency. You just have to reapply.

I worry about income tax as we are not at retirement age and are going from a fairly substancial income to almost nothing. Although, that is a pretty common scenario in Alberta during the "bust" years! We will see.

We plan to maintain an address here through a mail service or a relative.

[Mike OReilly]

We're in the same boat, so to speak . We're Ontario residents, leaving for our extended cruising life (which begins with a motorcycle trip). We're maintaining Ontario residency and OHIP for as long as we can. Eventually we're planning to let it all go though. Acute healthcare is fairly inexpensive most places (except the US and Canada!). For the other stuff, we'll likely maintain some sort of evac insurance ... maybe taking us to Alberta .

Income tax time will be interesting for us. We've gone from decent incomes to essentially no income. Hope Rev Canada doesn't get curious .

[avb3]

I'm an Alberta Snowbird who spends just under six months in Florida and areas each year. The issue of income tax that you're worried about is not Canada, however the one you do have to worry about is the United States. That is rectified by simply filing form 8840 with the IRS.

http://www.mnp.ca/en/media-centre/bl...ring-in-the-us

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[travellerw]

Originally Posted by avb3

I'm an Alberta Snowbird who spends just under six months in Florida and areas each year. The issue of income tax that you're worried about is not Canada, however the one you do have to worry about is the United States. That is rectified by simply filing form 8840 with the IRS.

Canadians Wintering in the U.S. - 01/02/2011

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I will not reside anywhere in the USA. So I'm pretty sure I won't have to fill out any American forms.

The income tax is an issue as I'm still required to fill out a Canadian income tax filling every year. Since our income will drop by over 100 fold, we are worried Revenue Canada will flag that. The only way to avoid filling out tax forms every year is to give up residency in Canada. This is a long and very difficult process that involves severing all ties with Canada (including bank accounts, credit cards, any property, even vehicles).

[micah719]

For something this important I'd seek the advice of a paid lawyer/accountant. That way you have someone to legally string up and lash if something goes pear-shaped.

[travellerw]

Originally Posted by micah719

For something this important I'd seek the advice of a paid lawyer/accountant. That way you have someone to legally string up and lash if something goes pear-shaped.

I have no idea what purpose a lawyer or an accountant would serve in this instance, other than costing money. What advice would they give.. "Hey, ya, do your taxes every year!".


They would have absolutely no involvment in an audit if it occured. Personal tax audits are between you and the government!

[Vasco]

Before you leave make sure that CRA (Canada Revenue Agency) has enough of your hard earned money to cover your tax liability. Then you can late file without a penalty.

[micah719]

Originally Posted by travellerw

I have no idea what purpose a lawyer or an accountant would serve in this instance, other than costing money. What advice would they give.. "Hey, ya, do your taxes every year!".


They would have absolutely no involvment in an audit if it occured. Personal tax audits are between you and the government!

Well, if it does go badly you'll be forking out a lot more for specialists, so better to do a little now while you have control over the cost.

Your laws are likely almost as complex as any other country....impenetrable, by design. Asking here on CF for experiences of people already doing what you intend is good, but in this case I'd take those condensed replies to an expert on your payroll for confirmation. An initial consultation isn't all that much, and if you ave legal insurance it might even fall under coverage. At least give it a thought?

[travellerw]

Originally Posted by micah719

Well, if it does go badly you'll be forking out a lot more for specialists, so better to do a little now while you have control over the cost.

Your laws are likely almost as complex as any other country....impenetrable, by design. Asking here on CF for experiences of people already doing what you intend is good, but in this case I'd take those condensed replies to an expert on your payroll for confirmation. An initial consultation isn't all that much, and if you ave legal insurance it might even fall under coverage. At least give it a thought?

Personally I disagree. Our tax laws are clear and I can call the CRA anytime I want (which I have). I wouldn't be controlling cost, I would just be throwing money away. Frankly lawyers around here are only versed in corporate tax law and would have very limited knowledge in personal tax law. Although accountants have some knowledge of our personal tax laws, they hold no legal responsibilty as they do not sign the docs (or put their name on them in any way).

The reason I worry is our tax system is highly automated and "flags" are put on personal taxes when things are "out of the norm". As an example, a close friends gets tax breaks for working in the deep north. Since his tax rate is outside the normal tax bracket, he is audited every year. In his case, his audit consists of a phone questionair.

Not sure why I would be forking out anything for a "specialist". If I do get audited we have specific laws in Canada that prevent a third party from dealing with it. Again an audit is between you and the government, no need for any legal representation unless you have broken the law. I would be required to come back and deal with the audit personally. A lawyers advice would be, "You should come back and deal with CRA, or the assesment will be completed without your input." The costs would be in the travel and accommodation back to Canada to deal with CRA.

[SVTatia]

Originally Posted by travellerw

... The only way to avoid filling out tax forms every year is to give up residency in Canada....

not really...

Originally Posted by micah719

For something this important I'd seek the advice of a paid lawyer/accountant. That way you have someone to legally string up and lash if something goes pear-shaped.

Originally Posted by travellerw

I have no idea what purpose a lawyer or an accountant would serve in this instance, other than costing money. What advice would they give.. "Hey, ya, do your taxes every year!"....

I did seek an accountant help and he wrote a letter to CRA stating I would be out of the country for x number of years without filing until my return. His (modest) fee was well spent and worth for the peace of mind.
Apparently CRA kept this on my file because I lived in Bermuda for 5 years and once I returned I filed at the regular time and there were no issues.

[travellerw]

Originally Posted by SVTatia

not really...





I did seek an accountant help and he wrote a letter to CRA stating I would be out of the country for x number of years without filing until my return. His (modest) fee was well spent and worth for the peace of mind.
Apparently CRA kept this on my file because I lived in Bermuda for 5 years and once I returned I filed at the regular time and there were no issues.

You obviously had no income while you were out of country.

CRA was very clear that if I had ANY income (from within or outside Canada) I would be required to fill out a tax filling. If I did not file, then I would be responsible for arrears taxes and interest.

We had a long and detailed conversation about how to avoid this. They were very clear that the only way to avoid that was to give up residency, which is done on a case by case basis. They pointed me to their website with the form to fill out. No accountant required!
NR73 - Determination of Residency Status (Leaving Canada)

I would be denied removal of residency for multiple reasons (owning property is one reason). I will be required to file and pay taxes while living abroad! Its up to me to file them yearly or wait till I come back and pay any taxes and penalties then.

I you know of another way, then please post it. I'm sure many many travelling people would like to know!