Hi David:
I had a similar question: I live in Ontario, have a
hose and two children,
university students, which I claimed as dependents on
all my Canadian tax
returns so far. If my wife and I move to the US to work
there and we
transfer ownership of the house (as a gift) to the
children, cancel all
credit cards and bank accounts and so on ... is that
going to make us non
residents of Canada? We would be coming back to Canada
probably every second
or third weekend to visit them.
P xxxxx
---------------------------
david ingram replies:
No, If you and your wife move to the US and work there
and leave the kids in the old house and do not put it
into the kids name, you will only be taxable in the USA
because that has become your centre of economic and
personal interests AND you will be there more than 183
days, have changed your driver's licences, given up
Canadian medical plans and bought American plans, etc.
Read 2(a) below - If the house is in your kids name but
you and your wife still have your old bedroom, it is
still available to you. The article does NOT say
anything about "ownership".
Lots of Americans have a winter ski cabin or a summer
cottage or both in Canada. That does not make a US
resident taxable in Canada.
-----Original Message-----
From: centapede at lists.centa.com
[mailto:centapede at lists.centa.com]
Sent: Saturday, November 27, 2004 1:09 PM
To: CENTAPEDE
Subject: ART IV US / Canada Tax Treaty -
Does Property
affect non-resident status in Canada- Ask a
cross-border immigration
non-resident income tax expert - David Ingram 's CE-NTA
Services in
North Vancouver BC Canada on It's Your Money CKBD AM600
My question is: Applicable to both US and Canada
QUESTION: We will be going to work in the US and would
like to buy a
property in Canada in our daughter's name. Will this
affect our Canadian
non-resident status or have any other tax implications.
Your advice is appreciated.
-------------------------------------------------------
--------------------
david ingram replies:
Article IV of the US / Canada Income Tax Convention
reads as follows:
Article IV - Fiscal Domicile - (it is the same number
in most treaties)
For the purposes of this Convention, the term "resident
of a Contracting
State" means any person who, under the law of that
State, is liable to
taxation therein by reason of that person's domicile,
residence,
citizenship, place of management, place of
incorporation or any other
criterion of a similar nature, but in the case of an
estate or trust, only
to the extent that income derived by the estate or
trust is liable to tax in
that State, either in its hands or in the hands of its
beneficiaries. For
the purposes of this paragraph, a person who is not a
resident of Canada
under this paragraph and who is a United States citizen
or alien admitted to
the United States for permanent residence (a "green
card" holder) is a
resident of the United States only if the individual
has a substantial
presence, permanent home or habitual abode in the
United states and that
individual's personal and economic relations are closer
to the United states
than any other third State. The term "resident" of a
Contracting State is
understood to include:
(a) the Government of that State or a political
subdivision or local
authority thereof or any agency or instrumentality of
any such government,
subdivision or authority, and
(b) (i) A trust, organization or other arrangement that
is operated
exclusively to administer or provide pension,
retirement or employee
benefits, and
(ii) A not-for-profit organization that was
constituted in that State,
and that is, by reason of its nature as such, generally
exempt from income
taxation in that State.
2. Where by reason of the provisions of paragraph 1 an
individual is a
resident of both Contracting States, then his status
shall be determined as
follows:
(a) he shall be deemed to be a resident of the
Contracting State in which he
has a permanent home available to him. If he has a
permanent home available
to him in both Contracting States, he shall be deemed
to be a resident of
the Contracting State with which his personal and
economic relations are
closer (centre of vital interests);
(b) if the Contracting State in which he has his centre
of vital interests
cannot be determined, or if he has not a permanent home
available to him in
either Contracting State, he shall be deemed to be a
resident of the
Contracting State in which he has an habitual abode;
(c) if he has an habitual abode in both Contracting
States or in neither of
them, he shall be deemed to be a resident of the
Contracting State of which
he is a national;
(d) if he is a national of both Contracting States or
of neither of them,
the competent authorities of the Contracting States
shall settle the
question by mutual agreement.
----
Answers to this and other similar questions can be
obtained free on Air every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred
Snyder of Dundee Wealth Management and I, David Ingram
will be hosting an INFOMERCIAL but LIVE talk show
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Those outside of the Lower Mainland will be able to
listen on the internet at
www.600AM.com
Local calls are taken at (604) 280-0600 and Long
Distance calls are taken at 1( 866) 778-0600
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=========================================
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