What did you do with your Canadian bank accounts?

Hi guys,

When you left Canada to move to the UK, did any of you close your bank accounts for tax purposes? And/or what was your experience with your Canadian bank accounts with Canadian taxes when you returned?

Many thanks,

Heather

I still use mine when I'm in Canada (I've been in England almost 4 years and have non-residential status in Canada for taxes).

I left it open to make it easier to pay off a borrowing account I had in Canada and advised the government of this when declaring nonresident status, and have just continued to keep it open for use when visiting Canada. I believe it will go dormant if I don't have any activity for a while so occasionally I go in and transfer a couple dollars between my checking and savings account on line.

Quick question, but how do you declare yourself non-resident for tax purposes? I'm coming up to my first filing from abroad and I've been here for just over 6 months.

I'd love to keep my PC bank account open since we'll use it on holidays for spending money, but I want to avoid high taxation and problems with Customs when we move back.

Thanks,
Cam

Having lived in Korea for 5 years and in the US for nearly 1, I can give some insight. The residency status is not something you can claim. If you're American you can do that--sadly, us Canucks cannot. Trust me, I know because I'm married to an American and we both lived overseas.

If you're paying taxes in one country, double check to see if there's some kind of reciprocation so that you don't have to file in two countries. Living in the US I only file in the US as a resident--living in Korea I had to file in Canada because there was no understanding between the two countries.

While living in Korea I kept my bank account open, and kept my driver's license, as well as my credit cards. Every year I filed the bank accounts were not factored in--my accountant (who also is my family's accountant and has plenty of international experience) told me that there's an 80,000 cap (it can change year to year, but on average it's about that).

In terms of moving back--you need to keep your ducks in a row. Get some kind of official document from whatever tax office is in your country (in Korea every "gu" had a tax office of some kind). That way when customs/revenue comes knocking at the door you have proof that you paid taxes overseas (I still don't get why the Canadian govt thinks people don't pay taxes overseas, but you need to cover your butt). Next get an accountant who's not afraid of them--our yells back at them and hangs up if they're rude to him in any way shape or form.

Finally, the only time you'll have a difficult time is if you own property. That can really make living overseas a bit more complicated than it has to be--this can be stuff in storage, land, a car etc.

There are basically two levels that the government looks at when considering your residency/non-residency status...primary and secondary ties.

Primary is property, dependents, businesses etc.

Secondary is passport, drivers license etc.

http://dir.rbcinvestments.com/pictures/ ... status.pdf

It's the the govt that will determine your residency status. A bank account can also come into play if you're paying off a student debt, or still attending school while you're overseas--that's one good argument for keeping it open.

Ok

I have been in China 8 years (Edmontonian) and here is the scoop.

You can of course come for 9 years and teach and not lose your rights and privileges as a Canuck.

HOWEVER!!!!

While you retain those RRSP's you will also retain your Canadian residence. As such, you WILL be expected to pay CANADIAN TAXES (30-35%) on your salary earned in China!!!

Trust me, I have talked to Rev Can SPECIFICALLY about this!!

You can keep your citizenship. but unless you want to turn over your hard earned income in China you must lose your residence. To do so you must sever all financial ties with Canada. No bank accounts, credit cards, RRSP's, property or investments. Literally there is a clause stating you must tell your friends and family you have no intention of coming back!!

personally I find this policy disgusting and unfair! US citizens can make 80,000 US dollars a year in China (literally a small fortune) before they must claim income tax. Canadians need to pay 35 cents off every dollar they earn! A gross money grab and nothing more.

For the record I am officially a non-resident and will continue to be such for the foreseeable future. The concept of paying 13% chinese tax and 35% canadian tax is not even slightly appealing to me.....

Chine has a tax treaty with canada which defines residence. If you meet Chinese tax residency, then you can declare Cdn non-residency as long as your primary ties are in China (Article 4). Financiial accounts in Canada do not consitute enough ties to override a home in China.

Talking to a RevCan telephlunkie will rarely yield a correct answer on anything but the simplest question, particularly treaty issues.

So, if one establishes residency in China (just like in US, and dozens of other treaty countries), one need not divest themselves of all financial ties in Canada to be declared non-resident.

I still have a couple PC Bank accounts including a TFSA. I have been living in the UK for a little over a year. I'm working and paying taxes here as well. I visited my parents in April and we went to our family accountant who filed my return as an emigrant. According to CRA I'm a non-resident already for tax purposes without filing that form because I filed an emigrant tax return. The accountant said only to file that form if I am asked to by them, but since Canada has a tax treaty with the UK, its unlikely that I'll be asked since the treaty spells it all out already. If/when we move to Canada I just have to file again as normal to resume residency for tax purposes.

With regards to the TFSA I'm no longer allowed to contribute money to it but I can withdraw from it. I'm not sure what will happen with any interest from my savings account. PC Bank doesn't do non resident accounts so they still think I'm living at my parents house. We just use the account for holiday spending. When the money eventually runs low I might consider topping it up with a wire transfer if I'm feeling particularly rich one month, but I wouldn't want to close it as its way too convenient. Same with my PC Mastercard.

Cam

Remember that the tax-free nature of TFSA does not necessarily apply to UK residents; ie. you may have to report the interest etc, on your UK return.

Most likely not, but there are similar accounts here called ISAs. I don't have one though.

Either way, the interest on "not much" is almost nothing anyway so I don't really care. Besides, I'm not filing a separate return, my employer does all that for me.. Pay As You Earn. With respect to PAYE, CRA could tear a page or two out of HMRC's book, though it would likely put H&R Block and co. out of business in the process.

Yes, but for PAYE, you need to report all sources of income so that theemployer correctly withholds, or, like you, you need to report the income separately.

You are earning income