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Old 19-02-2016, 08:52   #1
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Rules for Canadian's living out of Canada?

Hi all!
Looking for some help from those who are living the dream

Basically, as a Canadian, what do I rules are there to living outside of Canada and not loosing our rights and privileges? I would hate to run into problems with our medical coverage, CPP, or OAS.

I understand that if you are in the USA for over 180 cumulative days in a year you have to file American income taxes - but what about other locations? The Bahamas, Caribbean or even the Med... one can always dream! I know that we are talking about many, many different countries all with there own laws but if some one has some experience I would love to hear about it.

Love the forum and the help it provides. Thanks in advance!
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Old 19-02-2016, 09:06   #2
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Re: Rules for Canadian's living out of Canada?

I'll be following this thread Wbeaton b/c we're also heading away from Canada for a while. I've spent a little time researching these topics. My understanding is:

Healthcare: you can only be out of your home province for six or seven months out of each year (depending on the province). After that you theoretically will loose access to your provincial healthcare. Note, this includes travel inside of Canada, but outside of your home province, but I've never heard this being enforced.

CPP: My understanding is that residence doesn't matter. You can be anywhere in the world and still receive your CPP payments. But I look forward to more informed comments on this.

OAS/GIS: Here's where I think residency might matter. I think I read that you must be a Canadian resident to receive these benefits.

The whole question of what is a resident is also interesting. As I recall from my previous research, different agencies seems to calculate this differently. Rev Canada has one measure, provincial healthcare another. I recall in the case of the feds, it's calculated based on a number of factors. Keeping property and bank accounts active in Canada, having other property, and even having close relatives all factor in.
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Old 20-02-2016, 06:05   #3
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Re: Rules for Canadian's living out of Canada?

Greetings and welcome aboard the CF, Wbeaton.
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Old 20-02-2016, 08:06   #4
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Re: Rules for Canadian's living out of Canada?

In Ontario, in order to maintain OHIP you must be in the province for more than 5 months in a calendar year. You can also apply for a one-time exemption for up to 24 months, but must receive approval prior to your departure. Once coverage is lost, you must be back in Ontario for at least 3 months in order to regain coverage.

CRA rules dictate that, no matter how long you are out of the country, you remain a resident if you have (or are deemed to have) a settled intention to return. If you own property here (including chattels in storage) you will be deemed to be a Canadian resident. If you are a resident of Canada, you are required to pay taxes on your world income. Even if you cease to be a resident of Canada, you must still file and pay taxes on all Canadian income including interest/dividends from Canadian investments, pension payments, withdrawls from RRSP's etc.

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Old 20-02-2016, 08:57   #5
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Re: Rules for Canadian's living out of Canada?

Quote:
Originally Posted by Southern Star View Post
If you own property here (including chattels in storage) you will be deemed to be a Canadian resident.
Brad
This is not necessarily the case - it depends on the entire set of circumstances. Chattels in storage may indeed imply an intention to return, but could be argued otherwise in certain cases. Same with home ownership - you could get away with that if you rent it out long term and have taken other steps to divest of financial connections. "Going non-resident" is not a black/white thing. You are wise to get professional advice if that is the intention.
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Old 20-02-2016, 09:01   #6
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Re: Rules for Canadian's living out of Canada?

Quote:
Originally Posted by Wbeaton View Post
Hi all!

I understand that if you are in the USA for over 180 cumulative days in a year you have to file American income taxes -!
My understanding it is more complicated than that for the USA. I think the 180 days is not in a calendar year but at any point looking at the past 12 months. Also they use some averaging formula looking back over a number of years that can trigger a filing with much less than the 180 day rule.

There is also a form that needs to be filed with the IRS each year that documents your "connections" in Canada and the US. It appears if your connections are stronger in the US than in Canada they want you to file taxes regardless of how long you are in the country.

More information on this form here, US Tax Forms - IRS Forms W8-BEN and 8840 - Canadian Snowbird Association.

Bob
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Old 20-02-2016, 09:15   #7
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Re: Rules for Canadian's living out of Canada?

Sunsetrider, you are absolutely correct that one should seek legal advice - if it is your intention to give up Canadian residency status for income tax purposes. Of course, that is really only relevant to those who intend to earn income offshore and at that point, one needs to look into the tax laws of the country in which you earn income - as well as tax treaties as between that country and Canada.

Could you retain a residence in Canada and rent it out without being deemed to have a settled intention to return? Possibly, although one had best not store furnishings for that house - one individual was deemed to be a resident of Canada by storing a car with his children. Furthermore, you would lose the personal residence exemption from capital gains tax on that house - a killer in certain communities during periods when property values soared.

In any event, all of this is outside the scope of this thread - yes, if you are looking at maintaining your health insurance, as the OP is, you will definitely be deemed a resident of Canada. If you are looking at losing Canadian residency for tax avoidance - then you defintely need the advice of a very good tax lawyer!

Brad
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Old 20-02-2016, 09:20   #8
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Re: Rules for Canadian's living out of Canada?

So, instead of speculating I looked up Rev. Canada's website on the question: Determining your residency status. As has been said, it's not a single hard-and-fast rule, but rather a case-by-case determination made based on a number of factors. As it states:

An individual's residency status is determined on a case by case basis and the individual's whole situation and all the relevant facts must be considered.

The relevant facts in determining your residency status include: the residential ties you have in Canada, the purpose and permanence of your stays abroad, and your ties abroad.

The following steps can help you determine your residency status for income tax purposes and your tax obligations to Canada.


Significant residential ties to Canada include:
  • a home in Canada;
  • a spouse or common-law partner in Canada; and
  • dependants in Canada;
Secondary residential ties that may be relevant include:
  • personal property in Canada, such as a car or furniture;
  • social ties in Canada, such as memberships in Canadian recreational or religious organizations;
  • economic ties in Canada, such as Canadian bank accounts or credit cards;
  • a Canadian driver's licence;
  • a Canadian passport; and
  • health insurance with a Canadian province or territory.

I think healthcare is fairly easy to figure out, as Southern Star has explained. Note, some provinces allow you to be out-of-province for seven months, while others only give you six.

OAS/GIS is slightly more complicated. According to this document : To qualify for an OAS pension in Canada, applicants must be 65 years of age or older and must be Canadian citizens or legal residents of Canada at the time the pension is approved. However, to receive full benefits a person must have resided in Canada for at least 40 years after reaching the age of 18.

I didn't find any residency requirement for CPP.
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Old 20-02-2016, 09:24   #9
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Re: Rules for Canadian's living out of Canada?

Bob, you are correct - and the Canadian Snowbird Association is a good place to start doing research for those who intend to spend substantial periods in the US.
I took the OP's question as being related to cruising not only in the US, but if so, then yes it complicates matters!

Actually, one question just came to mind - would maintaining Canadian registration on your boat while cruising not also be evidence of a settled intention to return? Especially if you have no substantial connection with any other country - e.g., owning a residence there? I do know that it is in CRA's interests for someone who is earning income abroad to maintain Canadian residency, so....

Brad
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Old 20-02-2016, 09:32   #10
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Re: Rules for Canadian's living out of Canada?

Good morning everyone......it's a cold one here in Canada. I am counting the months that I will be living the dream myself. .
1-You can collect CPP and OAS while living anywhere in the world. (On your yacht). There will be a 15% - 25% withholding tax. Depends on if you are living in country that has a tax treaty with Canada.
2-Provincial insurance will vary from province to province and I would recommend private insurance for extended cruisers.
NOTE: Canada Reveue Agency wants you to file taxes as a resident of Canada and collect taxes. We are one of the highest taxed countries out there. There may be an advantage for some of you to sever your residential ties to be considered non-residents. You will need to consult with an advisor on this.

Good luck to all and safe passages...... I will continue dream until I wake up and just do it......72 months to go.
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Old 20-02-2016, 14:22   #11
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Re: Rules for Canadian's living out of Canada?

Well guys, this is how I did it. Times were different, not computerized and in 1975 I had my sailboat in Antigua and chartered for the Holiday Inns in Antigua and St.Lucia for 7 years. Always maintaining a valid Canadian address, bank account, drivers license and passport. Never a problem coming and goings.Visiting for weeks and returning. When I sold a property, I appeared in person at the tax office and was told that there was no taxes to pay (primary residence) and that I was allowed to have private residence anywhere in the world. I then sailed to the Bahamas and built a beach house on a small island. That was my primary residence. Very important that I maintained as always a valid passport, drivers license and address. I also maintained a bank account and all government cheques were direct deposited, they loved it. OHIP was never a problem, when I returned for a few weeks, I saw my doctors for check ups. Never a problem. Paid no taxes, because of no earnings, in Canada. All with the blessing of the CRS. After many years I sold my Bahamian property for a big profit in US funds, (higher at the time) and brought the money in my bank account, no taxes because of primary residence. All that sailing and no worries.
BUT that was then and this is now. Moved back to Canada in 2005. Good Luck now, I think times have changed.
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Old 20-02-2016, 14:26   #12
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Re: Rules for Canadian's living out of Canada?

It's not "cold in Canada", at least not in my part
+10C here and mostly sunny.
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Old 21-02-2016, 10:32   #13
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Re: Rules for Canadian's living out of Canada?

Quote:
Originally Posted by Wbeaton View Post
Hi all!
Looking for some help from those who are living the dream

Basically, as a Canadian, what do I rules are there to living outside of Canada and not loosing our rights and privileges? I would hate to run into problems with our medical coverage, CPP, or OAS.

I understand that if you are in the USA for over 180 cumulative days in a year you have to file American income taxes - but what about other locations? The Bahamas, Caribbean or even the Med... one can always dream! I know that we are talking about many, many different countries all with there own laws but if some one has some experience I would love to hear about it.

Love the forum and the help it provides. Thanks in advance!
Not that easy to lose your Canadian Citizenship: Most Provinces require one to be in Canada for 6mo each year for Medical; otherwise you wait 3 months to regain coverage. No restrictions on CPP & OAS.
If your not resident in the US you don't pay income tax. In fact I've lived and worked in the US, UK, Australia, SA & Russia and always paid Tax in Canada in preference because it's less expensive when you consider your first $80,000 of foreign earned income is tax exempt in Canada.
Lived in the Bahamas & Caribbean for 6 yrs and never paid tax there either.
Don't be concerned and follow your dream.
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Old 21-02-2016, 10:42   #14
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Re: Rules for Canadian's living out of Canada?

I live in BC and actually sent an email to our health-care provider.
They informed me of the 6 month rule, but also said that you can take a one time extended leave for up to two years ( 2 years ) without loosing coverage.
That is it is paid up to date of course.
Cheers, Catman
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Old 21-02-2016, 23:02   #15
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Re: Rules for Canadian's living out of Canada?

Is there a translator on the site for all the Canadian acronyms??
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