Factors affecting Canadian Residency status

Sujane80 · Post by **Sujane80** » Mon Jul 22, 2013 4:07 pm

If husband works and lives in US more than 183 days on TN, but owns 2 Canadian corporations and house in Canada and I live much of the time in Mexico with 2-3 visits to Canada of several weeks each, will we be deemed non-residents of Canada for taxes and health-care? We have been renting out the house on and off, but are thinking of selling it but maintaining the businesses and personal mail with Canadian mailing address. Will selling it make a difference?

nelsona · Post by **nelsona** » Mon Jul 22, 2013 5:08 pm

For healthcare, yes, you are risking being declared ineligible, since you must be physically in Canada for 183 nights in any 365 day period (152 nights for Ontario) AND your tax residence must be in that province.

And Since both US and Mexico have tax treaties which would (as you describe the situation) make you tax residents of those countries ( you in Mexico and your spouse in US) and not canada, you are also considered non-residents for tax purposes as well.

Owning a corporation or even a house does NOT make you a tax resident under these trwaties, and certainly does not satisfy the physical presence needed for provincial healthcare.

So, selling it makes no difference, you are already gone.

nelsona · Post by **nelsona** » Mon Jul 22, 2013 5:11 pm

Judging from your previous posts, your spouse has failed to maintain the sufficient ties in another country to avoid both US taxation and Cdn departure tax.

Same for you vis-a-vis mexico.

Sujane80 · Post by **Sujane80** » Mon Jul 22, 2013 5:51 pm

He has been in and out of the US and has only been there this time for 2 months (in the last 12 months). However, the client wants him long-term. It isn't a problem to start paying taxes in the US, and its not even a big factor to lose the health care since I can get it in Mexico, but I am assuming that the companies in Canada would not be able to continue and would have to be wound down? We have a choice at this point to keep the house and I live there with visits by my husband which I assume would prove continued Canadian residency?

nelsona · Post by **nelsona** » Mon Jul 22, 2013 8:50 pm

Yes, as was explined to you a few months back, he would have to make frequesnt visits to you in canada to claim Cdn tax residency, and then only pay US tax on US income and Cdn tax on everything.

But if he does not maintain CDn residence, teh Cdn corps will lose Cdn-controlled status, and would best be wound down.

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