Question about paying off Debt while overseas

Hello, been reading these forums a lot and have found some very valuable information.

I still have one question though and i'm hoping I can get some help. I'm moving overseas very soon to Dubai to do some work. The salary is very good and i'll be making great cash. I'll be paid in UAE currency. I don't own a house here, and plan on selling my car and other assets so to avoid paying tax when I return(2-3 years)

My question is I still have some credit card debt and a Line of Credit with my current bank here in Canada, and won't be able to pay it off before I leave. I will make enough to pay it all off in a few short months once I start in Dubai, but I am worried about the whole Non-resident issue. I understand that in order to claim as a non-resident I can't have any bank accounts ect here in Canada. If I do money transfers for the first few months to pay off my remaining debt, then not file a tax return for the years i'm away, when I come back will I get burned because I used "Tax free" money to pay off "Canadian" debt?

Once stuff is paid off, I will close all bank accounts and cancel all credit cards ect, but its the few months i'm earning money overseas and paying off debt I still have here i'm worried about.

Can anybody shed some light on this? Thanks!

No answer, but in same boat. Am thinking about cashing out RRSPs after leaving (so that will only pay withholding tax, and use this to pay off LOC and credit cards. Then once establish banking overseas, will close Cdn banking. I presume that there must be some transition period to move between cutting ties in Canada and establishing ties overseas - I hope to clean up ties within the calendar year of the move.

this strategy does rely on having RRSPs to cover total amount owing on LOC...

but I'm still hoping a tax 'guru' will answer your original question so I can be enlightened as well...

Hi,

If I were you I would inquire CRA about your non resident status. You can still have bank accounts in Canada and have your parents address for example. The residency is based upon where you are living and also about ties with the country you are leaving. One example of ties would be having children or/and spouse living here in Canada

I don't see any problems at all for you to pay off your Canadian debt. After all there is no UAE income tax so why are you concerned about not taxed dollars ? Remember you will be living and working there so your source of income is in UAE. Now if you plan to file income tax here in Canada too because you have people depending on you things are different. For that I would suggest to read the agreement between Canada and UAE and also drop a line to CRA.

GoingFar, did you find an answer to your question? I have pretty much the identical question. I will be going to Dubai and the end of August 2010.

Perhaps additionally, did you find out what it was that you needed to do to become nonresident here in Canada? I've looked at the CRA postings on this thing and they have various distinctions; 'factual' resident and 'deemed' resident of Canada, for example.

Any information you might post or links you could direct me to that might elucidate these matters would be very much appreciated.

Many thanks in advance.