Expat Canadian looking for Guidance to becoming non-resident, banking

Hello paulhen.

Welcome to Expat.com!

Hope you'll be guided by other members soon.

You could post a message on the Singapore forum.

Thank you,
Aurélie

Thanks for the welcome Aurélie. I have followed your suggestion and posted on the Singapore forum as well. All the best to you!

How about in sri lanka?

Hello paulhen,

Just a couple of things you should consider before you start moving your assets out of Canada.

1. Until you are deemed a non-resident for income tax purposes by CRA you will need to continue to file income tax returns in Canada. If you also have any income earned in any other country you will be required to report that on you T1-General as your "World Income", which while it won't be taxed per se, will be included in your total income so if it puts you up over your basic personal exemption you will pay much more taxes on any Canadian income.

2. Once declared a "Deemed Non-Resident" for income tax purposes any Canadian income, such as CPP, private pensions, etc., will be taxed at a rate of 25% withholding tax which is non-refundable. You may of course submit an NR-5 to have that tax reduced if your earnings are minimal and it is advantageous to you.

3.  If you are selling any Canadian assets, such as your home, property or business to convert those to cash then they will be subject to taxes or capital gains tax in the case of home or property.

4.  You will pay the exchange rate and any applicable fees to convert your Canadian funds into the local currency.

5.  Depending on the country you transfer your funds to you may have to pay some kind of financial transaction tax on those funds.

6.  You also need to find out if the country's Central Bank has imposed any kind of Capital Controls, so there will be an additional tax and maybe some "locking in" of the funds for a specified time period.

7. Even as a non-resident, once you start to receive CPP, QPP, private pension benifits or the like (or if you're already receiving them) you will once again need to start filing annual income tax returns in Canada. Only then will the withholding tax become refundable after having been declared a "Deemed Non-resident".

6.  In order to determine if your assets are really in a "safe haven" as you call it, you're also going to need to investigate what kind of deposit insurance that the local banks have (if any) and find out the limit to which those funds are insured. The CDIC (Canadian Deposit Insurance Corp.) benefits are something we Canadians tend to take for granted, but they make up a very important part of the benefits that keep our money secure in Canada. This might not exist in other countries.

So, at the end of the day, once you've done all your homework and the bookkeeping you might well find that your "safe haven" is the Canadian financial institution where your money already is.

Cheers,
William James Woodward - Brazil Animator, Expat-blog Team

First, I am grateful for your time and effort in making such a detailed reply. But of course, one good answer leads to another question. So my responses referenced to your numbered points:
1) I have no income outside of Canada. How much longer untaxed do you think? Is this not what the IRS is pursuing so aggressively?
2) I had been informed by a banker that the withholding is 15%? I will have to check for the NR-5 form.I have resided in Thailand for 16 months now and just filed income tax return as a non-resident to trigger a CRA review of my non-r status. Any downside to this that you are aware of?
I have previously downloaded and looked over NR73-12e. It certainly throws a whole lot into question by way of one having to report magazine subscriptions, professional/club memberships etc.
7) already receiving CPP as I took at 60, though it is a small one.

Have you an opinion about a safe haven bank and/or preferred country/jurisdiction?

Hi Paul,

Also receiving CPP and have no other income so I can tell you exactly your situation. File the NR-5 since it is greatly to your advantage, in my case they reduced the tax withheld from 25% to 10% with no questions asked. The reduction went into effect the month following receipt of my NR-5.

Since your early CPP benefits will probably not be much more than $6,000 CAD you will be well under the personal basic deduction so you will get all the taxes that CPP withheld as tax refund.

Your banker is wrong, the withholding tax is 25%.

If you should start earning some foreign income you will of course firstly need to pay taxes on that income in the country in which it is earned (unless under any exempt amount) and you will also need to report it as "world income" when filing your T1-General with CRA. As I mentioned before, while it won't be taxed in Canada it might put your CPP income in a position to be taxed since it could put your total income above the amount allowed as a basic personal exemption.

You will be required to continue filing an annual T1-General for as long as you have any Canadian income.

As far as the NR73-12e goes, forget it.... your income is so small as to be exempt anyway. Just file the return with your income and other essential figures, you'll still get every penny back.

Cheers,
James

Again you have provided me insights that can only come from experience and I am grateful for your willingness to share same. T1 filing is required if only CPP income? If not, then a point for not using Canadian banks?

If anyone has experience in respect to a specific bank, financial instruments (safe, very conservative ones for me at this point) and possibly contacts I would appreciate it.

As James says, Canadian banks are safe, but they have huge fees (often hidden) and pay very low interest rates relative to the market. Also, Form N73-12e leads me to believe it is one of the many factors used by CRA to disallow non-residency.

No, you'll need to file a T1-General if you have ANY Canadian income from any source.

Cheers,
William James Woodward - Brazil Animator, Expat-blog Team.

T2 was better.  It had a more developed story.  T3 was kind of stupid.

Yeah Hailey, but Canada's T1 has a General. I think he's even a 5 Star General at that. LOL

A Canadian general is like plain yogurt.

James, again I thank you for your response.

All the best,
Paul

HaileyinHongKong wrote:

A Canadian general is like plain yogurt.

Wrong again Hailey..... A Canadian General is like STRAWBERRY yogurt! Too sweet and awfully messy. hahahahaha

I heard the Canadian navy sent out their whole fleet but it sank when someone drained the bathtub.

HaileyinHongKong wrote:

I heard the Canadian navy sent out their whole fleet but it sank when someone drained the bathtub.

Hailey, how could it sink in an EMPTY bathtub? The truth is that if foundered and sank when somebody left the water running and the tub overflowed, but they've still got the 4 submariens at West Edmonton Mall which they can borrow in an emergency. heheheheheh