Stuart Adamson

'Morning all.

First of all - I'm not sure that this should really be under the immigration heading so please feel free to move it, mods.

I have recently applied for PR via Spousal sponsorship (Brit living in Middle East with Canadian (born) wife and two kids who both have dual Nationality and passports. Wife has been non-resident for 20 years.

We are currently evaluating our options for moving back when () my PR comes through and one of the options is for her to move back with our son for the beginning of the next school year (his big sister will be heading off to Uni in UK) while I continue to work overseas, pending approval from CIC.

Our major concern is how Revenue Canada would see this.

Clearly, my wife will be seen as resident as soon as she returns. I will not be and have no residential rights until my PR is approved. I am the primary (currently sole) breadwinner.

The big question is whether Revenue Canada will make efforts to tax my overseas income based on my wife's residence. If so, at what rate - as if I was resident or ??????

Tumbling_Dice

You know, I had written another answer to this but the fact you live in the Middle East means it is likely wrong.

I did a similar thing to you in that the wife moved over a year before I did. On my first Canadian tax return, I had to declare my UK income but, since I had been taxed on it and there was a double taxation agreement, the CRA did not hit me with anything and only taxed me on my Canadian income. I ad an accountant sort out my first year so there were no cock ups.

I suspect the double taxation agreement played a big part there.

Almost Canadian

If you are deemed to be a resident for tax purposes by CRA, you will pay tax at your marginal rate on your worldwide income.

However, based upon what you have stated, I doubt very much that you will be deemed to be a resident for tax purposes by CRA, notwithstanding the fact that your wife and one of your children will be residents in Canada. Much will depend upon how often you come to Canada during the period you refer to.

Stuart Adamson

Thanks for the replies - we hope that this situation would last for no more than 6 months - any visits would be minimal - possibly not at all until PR is received.

Steve_

Canada isn't like most other countries in this regard, CRA doesn't seem to give a stuff if you're a permanent resident, they care where you live. Your wife can file separately then you file jointly after you move here. Why the CRA has this enlightened attitude I'm not sure, I think it's because so many people go to the US and the IRCC doesn't want to have to keep reissuing PR status to people for tax reasons.

Generally speaking though the CRA's main objective in life is to ensure none of their tax revenue goes down south. Other countries they don't seem to care so much about.

If it's only six months I wouldn't sweat it.

Stuart Adamson

Almost Canadian

You need to ensure that you do all that you can to avoid becoming a resident for tax purposes until such time as you receive your gratuity then, including not making any visits to Canada.

Steve_

As someone stated above, the tax treaty is relevant, typically residency is determined under Article 4 of the relevant treaty. If there isn't one, the CRA use their own residency test. However the CRA doesn't have any real direct information sharing with any countries other than the UK and the US (and Québec shares information routinely with France) so basically you just don't file jointly for the first year your wife is in Canada, then you put down your date of arrival on your own T1.

If the CRA want to argue that you were resident in Canada because your wife lived in Canada, let them figure that out. If you currently live in a country with no income tax then there isn't even anyone for the CRA to get in touch with to ask.