US Citizen trying to avoid Canadian Tax Status

[webcite_99]

I am an American citizen who works for a U.S. company. My wife, who is not working, is a Canadian citizen who is a permanant resident of the U.S. (green card) and has lived outside of Canada for the past 8 years. We are thinking of buying a vacation home in Canada (under our name) and spending signifanct time visiting. I have the following questions:

1) So long as we spend less than 183 days in our vacation home in Canada in any given calender year, are we safe from being subjected to Canadian taxes?

2) Does purchasing a Canadian home in our name impact this situation in any way?

3) Is there information sharing between the border patrol and the Canada Revenue Agency? i.e. how would the C.R.A. actually know how many days you were in Canada in any given year?

Thanks,


Rick

[nelsona]

1) As long as you maintain MORE ties in US than in Canada (job, home, social ties) you will be fine. To do this you need to spend more time in US than Canada anyways, but even with less than 183 days in canada, if you don't maintain your US life as well, you could get dinged. You also must NOT attempt to avail yourself of things hat are reserved for Cdn residents (like Provincial Medicare).

2). No. It does open you up to more scrutiny, which, based on your next question seems to ne something you are wanting to avoid.

3) If you are buying a vacation home (ie. a FEW weeks a years), you are fine. If you are trying to live in Canada but pay US taxes, you will likely get tripped up. CRA can access all kinds of things to know whether you are in country a lot.

<i>nelsona non grata... and non pro</i>

[webcite_99]

Thanks Nelson. What I'm really trying to do is live in the US (job, home, social ties, etc.) but also appease my wife and spend close to 50% of our time (much more than a few weeks, but slightly less than 6 months) in Canada where the bulk of her family and friends are.

Based on your answers, while I may be flirting with the line a little, is it safe to assume that I'd be safe from getting hit with Canadian taxes?

Also, other than not availing myself to provincial healthcare, are there safeguards I could use?

Thanks again for your help.

Rick

[nelsona]

Yes. Your wife should not get a Cdn DL. She should not get a job in Canada, she should not join church, social or other clubs in canada (even library).

If she does, SHE will be considered Cdn resident, and in turn, YOU will come under closer and closer scrutiny, and # of days in Canada will not matter.

You might find that just giving in and becoming a full-fledgeed cdn resident might not be too much of a tax hit (you would probably need to start Cdn immig process), and you would be entitled to all the benefits of living in Canada (like heathcare, right to use RRSP tax sheltering, OAS, etc).
This might be worth the extra percent or two of taxes (since your going to be up there anyways).

Many Windsorites working in US, for example, do not pay a penny more in CDn tax than they already pay IRS and Michigan.

<i>nelsona non grata... and non pro</i>

[danny]

that might be true as differences between US and Canada are obviously significant but maybe not too significant given that one can access Cdn beneifts (althought the healthcare really needs to be upgraded in Canada, it takes ages to see a doctor).

But for someone who for example lives in Switzerland, where the taxes are even lower, it might make a lot of sense to break as many ties as possible with Canada and make the same ties in Switz as the tax differential is quite significant.