Answers Archive

Establish property Value Before Leaving Canada

Hi Rim, This is a very common situation, and you are right to think about it before selling rather than after. 1. How CRA determines the capital gain When you became a non-resident and began renting the property, there was a deemed disposition at the property’s fair market value (FMV) on the date you became … Continue reading

Non-resident tax implications on life insurance

Hi Kim, my condolences on your loss. From a Canadian tax perspective, a life insurance death benefit is not taxable in Canada, even if you are now a non-resident. Depositing the cheque into a Canadian bank account does not trigger Canadian tax or withholding, and the location where you deposit the funds (Canada vs. U.S.) … Continue reading

Gifting share of house

Dear Satinder, Thank you for your question regarding the rental property you own jointly with your daughter. You’re right to review this carefully, as there are tax implications under both options you mentioned. Based on the information you shared: You own 50% of a rental property with your daughter Purchase price was $850,000 Current value … Continue reading

HST Quarterly instalments

Hi Anthony, Good questions. This situation is very common when sales drop during the year. 1. Do you still need to pay the 4th instalment if you’ve already overpaid? No. If your actual HST net tax for the year will be less than the instalments already paid, you do not need to pay the 4th … Continue reading

How to delay OAS …if non-resident of Canada….

Hi Luke, Yes, as a non-resident of Canada, you can delay starting Old Age Security (OAS), and in your situation that is often a very sensible planning strategy. A few key points that should help clarify things: No application is required to “delay” OAS OAS only starts once you apply (or if you are auto-enrolled). … Continue reading

TFSA holdings

Hi Natalie, You’re asking the right question well in advance 👍 You’re correct that once you become a U.S. tax resident, a TFSA is not recognized as tax-free by the U.S. From a U.S. perspective: Interest, dividends, and capital gains inside a TFSA are taxable annually The account is not treated as a pension or … Continue reading

reg non residence tax return

Hi Dev, thank you for the clarification and for your kind words. To answer your questions directly: 1) Can Form T1159 be used to file 10 years of tax returns? No. Form T1159 is only the VDP application form. It is not a tax return and it cannot be used to report rental income or … Continue reading

REG VDP PROPOSAL FOR NON RESIDENCE WITH CANADIAN SOURCE INCOME.

Response: You are correct to be cautious here — Section 216 returns cannot be filed “through” the VDP, because Section 216 is an election, and elections are generally excluded from VDP relief. A few key points to clarify the process: 1.VDP vs. Section 216 elections The Voluntary Disclosures Program is intended to correct failures to … Continue reading

Declare a checking bank acct as non-resident

Hi Cho, Yes. Even if the chequing account does not earn interest, it should still be designated as non-resident once you become a non-resident of Canada. The non-resident designation is not based on whether the account earns income, but on your tax residency status. Banks are required to know whether an account holder is a … Continue reading

Issues from not paying Withholding Tax on Rental Income

Not Paying Non-Resident Withholding Tax on Canadian Rental Income Michael — thanks for laying this out clearly. Below is how CRA typically handles this. 1) Penalties and interest for 2025 Yes. Since 25% non-resident withholding was not remitted for 2025, CRA will generally automatically assess: A 10% late-remittance penalty on the unremitted tax, and Interest, … Continue reading

Option trading–can i setup a CCPC actively trading Option/stock and qualify SBD?

Can a CCPC actively trading options/stocks claim the Small Business Deduction (SBD)? Short answer: Yes — if the corporation is carrying on an active business and is not a Specified Investment Business (SIB), the Small Business Deduction can be claimed. The controversy comes from how CRA classifies proprietary trading businesses. Step 1: Is the activity … Continue reading

Question on secondary ties.

Answer: Secondary Ties, Health Insurance & Correcting Your Departure This is a very common situation, so you’re not alone. For Canadian tax residency, CRA does not look at any one factor in isolation. Residency is determined based on your overall residential ties, which are grouped into primary and secondary ties. 1. Provincial health insurance is … Continue reading

If I never cancelled my provincial health insurance for 3 years but was outside Canada living, will CRA expect I pay worldwide income?

Not cancelling your provincial health insurance does not automatically make you a Canadian tax resident, but it is a secondary residential tie that CRA will consider when assessing your tax residency, especially if you are trying to backdate your departure from Canada. How CRA determines tax residency CRA does not look at any single factor … Continue reading

Dividend question: does my corp need to fill out schedule 55 if a dividend was paid?

Hi, thanks for watching the videos and for your question. Short answer: Usually no. Schedule 55 (Eligible Dividend Designation) is only required if the corporation is designating a dividend as an eligible dividend under the gross-up and dividend tax credit rules. If you paid yourself a regular (non-eligible) dividend, which is the case for most … Continue reading

Planning for becoming Non Resident of Canada

Hi Vivek, Great question, and one that comes up often when clients are planning for non-residency. 1. No departure tax on accrued interest already reported If you have been reporting the annual accrued interest from your Indian Fixed Deposits / GICs on your Canadian tax return each year (as required), then there is no additional … Continue reading

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