Canadian Permanent Resident on renouncing PR & Departure Tax
Feb 20th 2019, 12:55 pm
#1
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Canadian Permanent Resident on renouncing PR & Departure Tax
Hi everyone.
I'm hoping someone could give me good advice regarding the above title. To give you background, I am Filipino Citizen with Canadian Permanent Resident (with a valid PR card) who has relocated to the UK on a settlement visa this year to live with my husband who is a British Citizen. My husband and I both hold Canadian PR having previously lived and worked there - he moved back to the UK for his job before i got the settlement visa and I have since joined him. As our long term goal is to remain in the UK we both understand that we need to renounce our permanent residence in Canada. My question is:
1.) What should we do in renouncing our permanent residence in Canada?
2.) In terms of departure tax and declaration of property/assets owned worldwide - I do not have any assets of my own, so I assume that I only need to declare assets in my name and not anything in my husbands name (such as shares, property etc.) - is this correct?
3.) Assets in my husbands name, I assume he handles as part of his own departure process. As such, if there were assets owned before he moved from the UK to Canada, and still owns now he has moved back to the UK, would these need to be declared?
4.) In renouncing my permanent residence, can I do it her in the UK or I should be in Canada?
Thank you so much and hoping for to hear your experiences o knowledge.
Regards,
I'm hoping someone could give me good advice regarding the above title. To give you background, I am Filipino Citizen with Canadian Permanent Resident (with a valid PR card) who has relocated to the UK on a settlement visa this year to live with my husband who is a British Citizen. My husband and I both hold Canadian PR having previously lived and worked there - he moved back to the UK for his job before i got the settlement visa and I have since joined him. As our long term goal is to remain in the UK we both understand that we need to renounce our permanent residence in Canada. My question is:
1.) What should we do in renouncing our permanent residence in Canada?
2.) In terms of departure tax and declaration of property/assets owned worldwide - I do not have any assets of my own, so I assume that I only need to declare assets in my name and not anything in my husbands name (such as shares, property etc.) - is this correct?
3.) Assets in my husbands name, I assume he handles as part of his own departure process. As such, if there were assets owned before he moved from the UK to Canada, and still owns now he has moved back to the UK, would these need to be declared?
4.) In renouncing my permanent residence, can I do it her in the UK or I should be in Canada?
Thank you so much and hoping for to hear your experiences o knowledge.
Regards,
Feb 20th 2019, 11:31 pm
#2
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
When my friend left Canada with PR card, he didn't renounce it and he didn't pay any taxes. He just left. I'm not knowledgeable, but are you sure you need to do all this? I doubt you do.
Feb 22nd 2019, 1:17 pm
#3
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
But thanks for sharing. I really hope someone could help me on this.
Feb 22nd 2019, 4:29 pm
#4
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
Thanks so much UsernamesRHard. Unfortunately, YES. I've read somewhere that you need to renounced, otherwise we might have problem in the future if ever we visit Canada (assuming we have expired PR card). Also, they have this worldwide tax thing, which means owning a property here in the UK are subject for taxes in Canada too, in the event of selling and stuff.
But thanks for sharing. I really hope someone could help me on this.
But thanks for sharing. I really hope someone could help me on this.
Feb 23rd 2019, 8:29 am
#5
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
As a Canadian citizen who became a USC, my husband doesn't have to declare his US owned property to CRA and neither did he ever have to declare his US income or retirement benefits to CRA. He needs to declare his Cnd pension to the US but not the other way around. Granted he is a Cnd citizen from birth so that might be the difference.
Feb 24th 2019, 4:22 pm
#6
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
OP as you only moved this year I suggest you hang on before you renounce in case you change your mind. I'm assuming you're not yet out of compliance with the Residency Obligation.
Last edited by Snowy560; Feb 24th 2019 at 4:24 pm.
Feb 26th 2019, 9:46 am
#7
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
So I'm really checking on people who have done this before.
But thanks for your suggestion Snowy560. I believe we both wanted to settle here permanently as we live near our family here.
Feb 26th 2019, 9:50 am
#8
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
My PR card validity is still until 2022. We were just worried about worldwide tax that will be imposed should we proceed in our plans like investing on properties or stocks here in the UK; you know just to prepare for our retirement.
So I'm really checking on people who have done this before.
But thanks for your suggestion Snowy560. I believe we both wanted to settle here permanently as we live near our family here.
So I'm really checking on people who have done this before.
But thanks for your suggestion Snowy560. I believe we both wanted to settle here permanently as we live near our family here.
You pay tax wherever you are tax resident - Canada won't take tax on money you earn in the UK if you are living there.
Last edited by christmasoompa; Feb 26th 2019 at 9:52 am.
Feb 26th 2019, 6:02 pm
#9
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
I'm just leaving and not saying anything. My Advice is to do the same. Than just before the PR expires - renounce it.
I think you'd just update CRA when you file your tax return for 2019 with your departure date is all. (It's all I did the first time I left Canada).
Done I'd think.
I think you'd just update CRA when you file your tax return for 2019 with your departure date is all. (It's all I did the first time I left Canada).
Done I'd think.
Feb 26th 2019, 6:33 pm
#10
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
I'm just leaving and not saying anything. My Advice is to do the same. Than just before the PR expires - renounce it.
I think you'd just update CRA when you file your tax return for 2019 with your departure date is all. (It's all I did the first time I left Canada).
Done I'd think.
I think you'd just update CRA when you file your tax return for 2019 with your departure date is all. (It's all I did the first time I left Canada).
Done I'd think.
Feb 28th 2019, 1:59 am
#11
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
We were in the same situation. US citizens who became Canadian permanent residents and lived there for a year. With difficulty finding a job in my field, we moved back to the US. This was 10 years ago. We didn't renounce PR as it was unnecessary. We had no departure tax nor were asked for any.
Once you leave, you need do nothing. Canada does not tax on worldwide income for its citizens (unlike the US) nor PRs who have left. So no tax filing necessary. If you ever return to Canada to visit (assuming your PR has expired with 2 out of 5 years not met), border officers may ask about your PR status with the question - how long have you been outside of Canada? At that point, they may mark your status as not having met PR requirements, but they will let you in (by law). But still there is no need to renounce and nothing more need be done.
Once you leave, you need do nothing. Canada does not tax on worldwide income for its citizens (unlike the US) nor PRs who have left. So no tax filing necessary. If you ever return to Canada to visit (assuming your PR has expired with 2 out of 5 years not met), border officers may ask about your PR status with the question - how long have you been outside of Canada? At that point, they may mark your status as not having met PR requirements, but they will let you in (by law). But still there is no need to renounce and nothing more need be done.
Last edited by Richard8655; Feb 28th 2019 at 2:09 am.
Mar 7th 2019, 10:27 pm
#12
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
We were in the same situation. US citizens who became Canadian permanent residents and lived there for a year. With difficulty finding a job in my field, we moved back to the US. This was 10 years ago. We didn't renounce PR as it was unnecessary. We had no departure tax nor were asked for any.
Once you leave, you need do nothing. Canada does not tax on worldwide income for its citizens (unlike the US) nor PRs who have left. So no tax filing necessary. If you ever return to Canada to visit (assuming your PR has expired with 2 out of 5 years not met), border officers may ask about your PR status with the question - how long have you been outside of Canada? At that point, they may mark your status as not having met PR requirements, but they will let you in (by law). But still there is no need to renounce and nothing more need be done.
Once you leave, you need do nothing. Canada does not tax on worldwide income for its citizens (unlike the US) nor PRs who have left. So no tax filing necessary. If you ever return to Canada to visit (assuming your PR has expired with 2 out of 5 years not met), border officers may ask about your PR status with the question - how long have you been outside of Canada? At that point, they may mark your status as not having met PR requirements, but they will let you in (by law). But still there is no need to renounce and nothing more need be done.
Richard 8655, I would like to ask if you still file tax return in CRA every year. Declaring no income in Canada? How about your property in the US, do you need to include it in your declaration of assets? This is our concern, although the property is where we currently live here in the UK, so we don’t earn anything, does CRA impose tax on the property value? I don’t know if I made sense. Was wondering what did you do before your PR expires.
hope to hear from you.
thanks,
Mar 8th 2019, 4:02 pm
#13
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
Richard 8655, I would like to ask if you still file tax return in CRA every year. Declaring no income in Canada? How about your property in the US, do you need to include it in your declaration of assets? This is our concern, although the property is where we currently live here in the UK, so we don’t earn anything, does CRA impose tax on the property value? I don’t know if I made sense. Was wondering what did you do before your PR expires.
hope to hear from you.
thanks,
Once we crossed the land border and returned to the US, we continued to file both CRA and US returns. But we filed CRA returns only because we still owned a house in Canada and had property taxes to report. A year later we visited Canada briefly to sell our house and then returned to the US. Ever since, we never filed CRA returns again as there was no longer any Canadian income or tax to account for. CRA indicates if no taxes are due or refunds expected, returns need not be filed.
We never declared our US house on any CRA return, as we didn't sell it during our time there (which would have been a capital gain). To my knowledge, foreign owned property does not impose any CRA tax based only on ongoing value. Only selling impacts CRA reporting since (as mentioned) that would be income as a capital gain. However, once you consider yourself no longer a resident of Canada (whether still a PR or not), it's not necessary to report any foreign income or foreign property changes as these rules only apply to PRs and citizens who's primary residence is Canada.
So PR status can be maintained without filing annual CRA returns. However, that would make PR renewal after 5 years more difficult as tax returns are a primary way of proving that residency requirements are fulfilled. Nevertheless, you always have PR status unless revoked, no matter how long you've been absent from Canada. So we are not revoking, as it doesn't impact anything negatively and you never know what might change in the the future.
This is my understanding of CRA and PR rules, and hope it helped and didn't confuse! If any other Canada PR expats here have other information, please correct.
Last edited by Richard8655; Mar 8th 2019 at 4:10 pm.
Mar 14th 2019, 6:32 pm
#14
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
Hi
Hi oxygen28,
Once we crossed the land border and returned to the US, we continued to file both CRA and US returns. But we filed CRA returns only because we still owned a house in Canada and had property taxes to report. A year later we visited Canada briefly to sell our house and then returned to the US. Ever since, we never filed CRA returns again as there was no longer any Canadian income or tax to account for. CRA indicates if no taxes are due or refunds expected, returns need not be filed.
We never declared our US house on any CRA return, as we didn't sell it during our time there (which would have been a capital gain). To my knowledge, foreign owned property does not impose any CRA tax based only on ongoing value. Only selling impacts CRA reporting since (as mentioned) that would be income as a capital gain. However, once you consider yourself no longer a resident of Canada (whether still a PR or not), it's not necessary to report any foreign income or foreign property changes as these rules only apply to PRs and citizens who's primary residence is Canada.
So PR status can be maintained without filing annual CRA returns. However, that would make PR renewal after 5 years more difficult as tax returns are a primary way of proving that residency requirements are fulfilled. Nevertheless, you always have PR status unless revoked, no matter how long you've been absent from Canada. So we are not revoking, as it doesn't impact anything negatively and you never know what might change in the the future.
This is my understanding of CRA and PR rules, and hope it helped and didn't confuse! If any other Canada PR expats here have other information, please correct.
1. You should have filed a T1135 if your foreign property was worth over $100K when you were resident in Canada. If you don't report foreign property to CRA, it can be extremely expense if you are caught.
Hi oxygen28,
Once we crossed the land border and returned to the US, we continued to file both CRA and US returns. But we filed CRA returns only because we still owned a house in Canada and had property taxes to report. A year later we visited Canada briefly to sell our house and then returned to the US. Ever since, we never filed CRA returns again as there was no longer any Canadian income or tax to account for. CRA indicates if no taxes are due or refunds expected, returns need not be filed.
We never declared our US house on any CRA return, as we didn't sell it during our time there (which would have been a capital gain). To my knowledge, foreign owned property does not impose any CRA tax based only on ongoing value. Only selling impacts CRA reporting since (as mentioned) that would be income as a capital gain. However, once you consider yourself no longer a resident of Canada (whether still a PR or not), it's not necessary to report any foreign income or foreign property changes as these rules only apply to PRs and citizens who's primary residence is Canada.
So PR status can be maintained without filing annual CRA returns. However, that would make PR renewal after 5 years more difficult as tax returns are a primary way of proving that residency requirements are fulfilled. Nevertheless, you always have PR status unless revoked, no matter how long you've been absent from Canada. So we are not revoking, as it doesn't impact anything negatively and you never know what might change in the the future.
This is my understanding of CRA and PR rules, and hope it helped and didn't confuse! If any other Canada PR expats here have other information, please correct.
Mar 15th 2019, 1:59 am
#15
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Re: Canadian Permanent Resident on renouncing PR & Departure Tax
I don't think most PRs intend to evade CRA in hopes of not "getting caught". Regardless of level of honestly, there's just too much at stake in losing residency status in attempting such action.
