Deemed disposition on my Canada corp when moving to the US and later returning

[studebaker]

Hi, I've searched the forum for similar topics, but cannot find any, so here's hoping this is not a repeat.

I am planning move from Canada to the US shortly for a good work opportunity (I am a dual citizen), but I plan to return back to Canada to retire in about 10 years. For the last 15 years I have operated an Ontario CCPC corp for which I own all shares. At this point, the corp has significant cash & investment holdings that I had planned to draw down on during retirement.

I have been informed that if I move to the US, and become a Canadian non-resident, the Canada corp will need to be considered liquidated or sold as part of the deemed disposition (i.e. departure tax), which results in a sickeningly huge personal tax obligation (i.e. many hundreds of thousands of dollars).

I am trying to figure out how to defer the payment of this large deemed disposition, how to post security for this amount to the CRA, and then later on elect to unwind this deferred tax when I return back to Canada in 10 years to retire.

Does anyone have similar experience (specifically related to deemed dispositions on a personal corp due to moving to the US) and how they managed all of this?

Any help is greatly appreciated.

[nelsona]

First off, a DEEMED disposition, by definition is not an actual sale, so you are not required to sell your company.

Second, one of the exceptions to deemed disposition is:
"Canadian business property (including inventory) if business is carried on through a permanent establishment in Canada."

The reason this would have an exception is because a Cdn corp remains taxable regardless of your place of residence .Now, this *may* be slightly different if you no longer have a permanent establishment, since you are not likely to have one even now.

One thing for certain though, is that as a non-resident, your corp would no longer benefit from CCPC status since it would no longer be "Cdn controlled"

If your corp or its holdings ARE subject to deemed disposition, or if you elect to have them treated as deemed disposed, you can request relief from being immediately taxed by contacting CRA. Only they can tell you what they view as adequate security in lieu of paying the tax on your deparure return.

https://www.canada.ca/en/revenue-agency ... perty.html

[studebaker]

Thanks very much Nelsona for your reply.

[herdface3]

I was wondering about this too. Luckily I found a thread similar to my question.