Hello
I may return to Canada soon as my overseas job has ended. In addition to the move back administration, I plan to transfer my savings back to Canada into a bank account and then leave again for a while for travel. Would opening an account make me a resident for tax purposes right away ?
I am also a bit confused about the currency issues as my savings are in a different currency and I am not sure whether i should convert to CAD before or after the move or even leave it in the original currency ? I am doing some research on the rates and so on.
thanks
returning to Canada and then leaving again maybe
Moderator: Mark T Serbinski CA CPA
Where you keep your money has no bearing on Cdn tax residency. where you LIVE is the key.
The key is outweighing your Cdn ties with foreign ones.
If you only come back to Canada for a few weeks and don't renat at aplace, or store your stuff, you will not be considered as having returned, yet.
Of course, if you make little or no income during this period of travel, it doesn't matter if you are Cdn resident or not, you will owe no tax.
The key is making sure than any income that was coming to you in the other country is paid to you before re-establishing residential ties in Canada.
The key is outweighing your Cdn ties with foreign ones.
If you only come back to Canada for a few weeks and don't renat at aplace, or store your stuff, you will not be considered as having returned, yet.
Of course, if you make little or no income during this period of travel, it doesn't matter if you are Cdn resident or not, you will owe no tax.
The key is making sure than any income that was coming to you in the other country is paid to you before re-establishing residential ties in Canada.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing 
Thanks nelsona. Ya I am a bit confused as to what to do. I dont have a job offer ready to go in Canada and though my overseas job has ended, would like to try other options and travel a bit before returning to live in Canada. I got the point about the funds and the ties. Also the pension and other income must be cashed out before returning.
The tricky part is that if i move all my stuff and put it in storage in Canada and then just in case i get a job offer overseas again then the storage is really a huge factor in making me a resident or else I would have to move everything again. Dont know what to do with my stuff really move it back or keep it elsewhere.
The tricky part is that if i move all my stuff and put it in storage in Canada and then just in case i get a job offer overseas again then the storage is really a huge factor in making me a resident or else I would have to move everything again. Dont know what to do with my stuff really move it back or keep it elsewhere.
As I said, outweighing your ties in canada is the key if you are going to a treaty country.
Unfortunately, putting your possessions in storage in canada, while having no other permanent home elsewhere, would likely classify you as a Cdn tax resident from the time you imported your stuff (in fact, at customs you will be in essence declring that you have returned with your stuff). To be considered departed again, you would need to establish a home elsewhere. If the other country has a treaty, then your stored stuff has no impact, but if your next job is in a non-treaty country, then the storage ties you until you move it back out.
Unfortunately, putting your possessions in storage in canada, while having no other permanent home elsewhere, would likely classify you as a Cdn tax resident from the time you imported your stuff (in fact, at customs you will be in essence declring that you have returned with your stuff). To be considered departed again, you would need to establish a home elsewhere. If the other country has a treaty, then your stored stuff has no impact, but if your next job is in a non-treaty country, then the storage ties you until you move it back out.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
Yes I know. That's the dilemma. Not sure right now about my plans and at customs, my imported goods makes me a resident not to mention the cost of moving back and storage. Thanks for confirming except onen thing.
I personally think from what I know is that even a move to a treaty country and having personal effects in storage in Canada can be tricky. It is 'almost' a primary tie as it is rented space with personal effects in it. I hope that is not the case but what i have read about ties, storage is a grey area, treaty or non treaty country you are moving to.
thanks
I personally think from what I know is that even a move to a treaty country and having personal effects in storage in Canada can be tricky. It is 'almost' a primary tie as it is rented space with personal effects in it. I hope that is not the case but what i have read about ties, storage is a grey area, treaty or non treaty country you are moving to.
thanks
[quote="nelsona"]Where you keep your money has no bearing on Cdn tax residency. where you LIVE is the key.
The key is making sure than any income that was coming to you in the other country is paid to you before re-establishing residential ties in Canada.[/quote]
I was just a bit confused about the pension. Since most posts on the forum talk about IRA/Roth (which I have no clue about since I have never had these), can anyone how i should liquidate my pension ie cash it out and then just move it to a regular account ? I have worked in non US location.
The key is making sure than any income that was coming to you in the other country is paid to you before re-establishing residential ties in Canada.[/quote]
I was just a bit confused about the pension. Since most posts on the forum talk about IRA/Roth (which I have no clue about since I have never had these), can anyone how i should liquidate my pension ie cash it out and then just move it to a regular account ? I have worked in non US location.
This depends on the rules of your country and the plan that your employer had. canada, for example, you can only liquidate pensions under strict rules (age amount, vesting, etc), not merely because you quit your job.
Even a US worker can't simply take a company pension when he leaves, unless the pension rules allow it. the rules in your employer's country would best be known by your employer.
Even a US worker can't simply take a company pension when he leaves, unless the pension rules allow it. the rules in your employer's country would best be known by your employer.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]This depends on the rules of your country and the plan that your employer had. canada, for example, you can only liquidate pensions under strict rules (age amount, vesting, etc), not merely because you quit your job.
Even a US worker can't simply take a company pension when he leaves, unless the pension rules allow it. the rules in your employer's country would best be known by your employer.[/quote]
Well the way it works is that the pension gets rolled into an individual retirement account and when the employee leaves the country, they tax it and then transfer it to whatever account the employee has given them. That is it. The same as would probably apply to a 401K I would think. thanks, just that there is nothing like Roth here.
Even a US worker can't simply take a company pension when he leaves, unless the pension rules allow it. the rules in your employer's country would best be known by your employer.[/quote]
Well the way it works is that the pension gets rolled into an individual retirement account and when the employee leaves the country, they tax it and then transfer it to whatever account the employee has given them. That is it. The same as would probably apply to a 401K I would think. thanks, just that there is nothing like Roth here.
In the US only *some* pensions (ie cash balance accounts) can be rolled into a personal IRA account. Defined benefit plans, for example, cannot, until retirement age at which time they are paid out periodically or in lump sum.
In canada, most pensions are lock-in, even when handed over to the worker, until some fixed age, depending on the rules under which the pension plan was established.
So, that is 2 countries, with already several possible outcomes for one's pension when leavinga a company.
So, I'm quite sure that your country (which you curiously avoid mentionning, btw) has its own set of rules, which your company pension has to adhere to.
In canada, most pensions are lock-in, even when handed over to the worker, until some fixed age, depending on the rules under which the pension plan was established.
So, that is 2 countries, with already several possible outcomes for one's pension when leavinga a company.
So, I'm quite sure that your country (which you curiously avoid mentionning, btw) has its own set of rules, which your company pension has to adhere to.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
[quote="nelsona"]In the US only *some* pensions (ie cash balance accounts) can be rolled into a personal IRA account. Defined benefit plans, for example, cannot, until retirement age at which time they are paid out periodically or in lump sum.
In canada, most pensions are lock-in, even when handed over to the worker, until some fixed age, depending on the rules under which the pension plan was established.
So, that is 2 countries, with already several possible outcomes for one's pension when leavinga a company.
So, I'm quite sure that your country (which you curiously avoid mentionning, btw) has its own set of rules, which your company pension has to adhere to.[/quote]
Thanks. I am moving from Switzerland where the rules for pensions seem to be simple and yet complicated. Basically they get rolled into an IRA type of account so with multiple employers it just goes into that account ie a special account set up for that. The company has to adhere to basic rules in Switz and then top it up with their own pension schemes. But all gets transferred to the special account. When you leave the country you pay the exit tax and take it (there are some complications if one is EU national or so but I didnt bother asking)
thanks again
In canada, most pensions are lock-in, even when handed over to the worker, until some fixed age, depending on the rules under which the pension plan was established.
So, that is 2 countries, with already several possible outcomes for one's pension when leavinga a company.
So, I'm quite sure that your country (which you curiously avoid mentionning, btw) has its own set of rules, which your company pension has to adhere to.[/quote]
Thanks. I am moving from Switzerland where the rules for pensions seem to be simple and yet complicated. Basically they get rolled into an IRA type of account so with multiple employers it just goes into that account ie a special account set up for that. The company has to adhere to basic rules in Switz and then top it up with their own pension schemes. But all gets transferred to the special account. When you leave the country you pay the exit tax and take it (there are some complications if one is EU national or so but I didnt bother asking)
thanks again
See, you may have options to leave the pension there until later. The exit tax may be more than what you would pay later, should you return there.
Also, remember to follow-up at retirement time about the swiss social security you liley are entitled to, and whether your CPP in Canada has any bearing on this.
Also, remember to follow-up at retirement time about the swiss social security you liley are entitled to, and whether your CPP in Canada has any bearing on this.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing
sure, I wiil ask again if I can leave it there until later. Dont think I will return but you never know as you suggested.
Yes I have to call the international social security folks here to see how it links up with the CPP. Combined, it should make up the 10 years needed but I think the Swiss system gives something if one has contributed for a few years.
Yes I have to call the international social security folks here to see how it links up with the CPP. Combined, it should make up the 10 years needed but I think the Swiss system gives something if one has contributed for a few years.