Dual Citiizen - Family May Go To Canada - My Residency?

[CanUs2013]

I am a dual citizen, born in Canada and moved to the U.S. in 1998 (L-1A visa, then Permanent Resident, now U.S. citizen for 8 years). At the time I moved I severed all ties to Canada except for my RSP account (sold house, got rid of bank and non-RSP investment held with Canadian firms, etc.)

We are considering having our children go to Canada next year to attend a private French language school for 3-4 years. My U.S. citizen spouse (Canadian Permanent Resident status is pending) would move with them and I would remain in the U.S. living in our house here (wholly owned) and continuing to work here. I would visit them from time-to-time (frequency and duration would depend on if this impacted my tax resident status). We would likely rent in Canada.

I am confused as to whether Canada would consider me a resident for tax purposes. I have read the CRA publication on this and it is clear that my spouse and children living there would constitute a "significant residential tie" to Canada for me even though I would stay at our current home a majority of the time and continue working in the U.S. However, it seems I could be considered a "deemed non-resident" since our permanent home remains in the U.S. and all of my (and our joint) financial holdings will remain in the U.S. (except for funds needed by family to live in Canada).

I've tried to interpret the Canada - U.S. tax treaty treatment of this and it seems I would remain soley a U.S. tax resident. Am I off-base or is there a chance I would become a tax resident in Canada? Would visit frequency, duration and total days in a year impact this? Thanks so much for your help.

[nelsona]

Before addressing YOUR residency, there is the issue of your spouse. Is not her permanent residency application based on YOU moving back to canada. CIC typically does not process spousal immigrant unless ands until the CDn spouse is moving back to Canada. So you might want to look into this, since you may, in effect, be telling CIC that you are moving back to Canada.

Now, to your residency. There is no dounbt right now that you are a non-resident.

If your spouse moves to canada and lives there, then she will become Cdn resident. With her and the kids living in Canada, and YOU having a place to live, there you fall into either the deemed non-resident (which means nothing changes for you) by treaty or the resident category by CRA rules or by treaty.

Much will depend on how much ytime you spend in Canada. If you are the one going to visit them, then you are showing your center of viatl interst to be in Canada, and will be considered Cdn resident. If They on the other habnd come and visit you, then you are maintaining yourcenter in US, and will continue to be considered non-resident (now by treaty, rather than by fact).

So it will depend on how much ties you have to make for CIC to consider you to have made the move to Canada in support of your immigration bid, vs. how little time you spend in canada thereafter.

it may be a tightrope difficult to navigate, so you should be considering what the tax consequences of bwing considered a Cdn residnet will be, and perhaps mitigating the effects.