Selling house in Canada before moving back to Ireland
#1
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Selling house in Canada before moving back to Ireland
I'm so confused! We are moving back to Ireland from Canada in March 2010. We are definitely selling our house before we go. I used to think that as long as it sold before we left we'd be OK tax-wise, but I just read in another thread that you have to be ordinarily resident in the year you sell (183 days) in order to avoid capital-gains tax, a definition we would not meet if we sell in early 2010 and then leave in March. Then I read on another forum that this is not a problem due to tax treaties? Completely bewildered here...does anyone have any advice??
#2
Re: Selling house in Canada before moving back to Ireland
Which country's law is being discussed. You are not clear. And do you mean the Republic of Ireland or Northern Ireland?
#3
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Re: Selling house in Canada before moving back to Ireland
Sorry for not being clear! I'm talking about having to pay capital gains tax in Canada. We are moving to the Republic of Ireland. Thanks.
#4
Re: Selling house in Canada before moving back to Ireland
As a general rule, you would be liable for Canadian capital gains tax on the (Canadian) property, subject to any exemption for it being your main residence.
How long have you been away from the Republic of Ireland?
How long have you been away from the Republic of Ireland?
#5
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Re: Selling house in Canada before moving back to Ireland
Thanks JAJ. We have been here since Mar 2005, on work permits. The house is our primary (and only) residence, so we should be eligible for the exemption. But will that exemption still apply if we sell it in 2010, a year in which we will not be considered ordinarily resident in Canada?
**Edited to change 2004 to 2005 - I really am dizzy today!
**Edited to change 2004 to 2005 - I really am dizzy today!
Last edited by JNLS; Aug 5th 2009 at 6:33 pm.
#6
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Re: Selling house in Canada before moving back to Ireland
from Revenue Canada
http://www.cra-arc.gc.ca/E/pub/tp/it...it120r6-e.html
other sources
http://www.grantthornton.ca/insights...0802061119-515
http://www.torontocasolutions.com/pd...m%20Canada.pdf
http://www.cra-arc.gc.ca/E/pub/tp/it...it120r6-e.html
other sources
http://www.grantthornton.ca/insights...0802061119-515
http://www.torontocasolutions.com/pd...m%20Canada.pdf
#7
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Re: Selling house in Canada before moving back to Ireland
Thanks JAJ and nutgrove! I looked through the links. This text from the Revenue Canada website seems to suggest that the 183-day-rule is not an absolute. We are not planning anything tricky - just a straightforward, sell-everything-in-Canada, move-it-all-to-Ireland job. So I think we'll be ok. Thanks for the calming advice, as you can see I am a bit panicky about this whole move!
The question of whether a housing unit is ordinarily inhabited in the year by a person must be resolved on the basis of the facts in each particular case. Even if a person inhabits a housing unit only for a short period of time in the year, this is sufficient for the housing unit to be considered "ordinarily inhabited in the year" by that person. For example, even if a person disposes of his or her residence early in the year or acquires it late in the year, the housing unit can be considered to be ordinarily inhabited in the year by that person by virtue of his or her living in it in the year before such sale or after such acquisition, as the case may be. Or, for example, a seasonal residence can be considered to be ordinarily inhabited in the year by a person who occupies it only during his or her vacation, provided that the main reason for owning the property is not to gain or produce income.
#8
Joined: Sep 2008
Posts: 12,830
Re: Selling house in Canada before moving back to Ireland
This is what you my need
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-08e.pdf
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-08e.pdf
#9
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Re: Selling house in Canada before moving back to Ireland
Thanks JAJ and nutgrove! I looked through the links. This text from the Revenue Canada website seems to suggest that the 183-day-rule is not an absolute. We are not planning anything tricky - just a straightforward, sell-everything-in-Canada, move-it-all-to-Ireland job. So I think we'll be ok. Thanks for the calming advice, as you can see I am a bit panicky about this whole move!
So as a suggestion look to the person that did the closing when you bought the home, give them a ring & ask the question - then you will know 100%
#10
Re: Selling house in Canada before moving back to Ireland
This is what you my need
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-08e.pdf
http://www.cra-arc.gc.ca/E/pbg/tf/t1161/t1161-08e.pdf
http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-08e.pdf
I dont know if there is a way to avoid the CGT when you leave.
Wheres JonboyE when you need him
#11
Re: Selling house in Canada before moving back to Ireland
Maybe you could sell before the end of 2009 and rent till you go home.
Saves worrying doesn't it?
Saves worrying doesn't it?
#12
Joined: Sep 2008
Posts: 12,830
Re: Selling house in Canada before moving back to Ireland
This one isn't it?
http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-08e.pdf
I dont know if there is a way to avoid the CGT when you leave.
Wheres JonboyE when you need him
http://www.cra-arc.gc.ca/E/pbg/tf/t1243/t1243-08e.pdf
I dont know if there is a way to avoid the CGT when you leave.
Wheres JonboyE when you need him
#13
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Re: Selling house in Canada before moving back to Ireland
Thanks for all the replies.
nutgrove - Would that be the lawyer who did our settlement? I can try ringing him, but I do find people tend to be clueless once you throw international issues into the mix.
Mummy in the foothills
We did think of this, but moving house twice in the space of a few months with 2 toddlers in tow was not appealing!
So I've looked up the Ireland-Canada tax treaty and am now more confused than ever. This seems to be the relevant section, only problem is I haven't a clue what it means!
nutgrove - Would that be the lawyer who did our settlement? I can try ringing him, but I do find people tend to be clueless once you throw international issues into the mix.
Mummy in the foothills
Maybe you could sell before the end of 2009 and rent till you go home.
Saves worrying doesn't it?
Saves worrying doesn't it?
So I've looked up the Ireland-Canada tax treaty and am now more confused than ever. This seems to be the relevant section, only problem is I haven't a clue what it means!
Where an individual ceases to be a resident of a Contracting State and by reason thereof is treated under the laws of that State as having alienated property before ceasing to be a resident of that State and is taxed in that State accordingly and at any time thereafter the individual becomes a resident of the other Contracting State, the individual may elect to be treated for purposes of taxation in the other State as if the individual had, immediately before ceasing to be a resident of the first-mentioned State, sold and repurchased the property for an amount equal to the lesser of its fair market value at that time and the amount treated for the purposes of taxation in the first-mentioned State as realised by the individual under such deemed alienation. However, this provision shall not apply to property any gain from which, arising immediately before the individual became a resident of that other State, may be taxed in that other State.
#14
Joined: Sep 2008
Posts: 12,830
Re: Selling house in Canada before moving back to Ireland
Thanks for all the replies.
nutgrove - Would that be the lawyer who did our settlement? I can try ringing him, but I do find people tend to be clueless once you throw international issues into the mix.
Mummy in the foothills
We did think of this, but moving house twice in the space of a few months with 2 toddlers in tow was not appealing!
So I've looked up the Ireland-Canada tax treaty and am now more confused than ever. This seems to be the relevant section, only problem is I haven't a clue what it means!
nutgrove - Would that be the lawyer who did our settlement? I can try ringing him, but I do find people tend to be clueless once you throw international issues into the mix.
Mummy in the foothills
We did think of this, but moving house twice in the space of a few months with 2 toddlers in tow was not appealing!
So I've looked up the Ireland-Canada tax treaty and am now more confused than ever. This seems to be the relevant section, only problem is I haven't a clue what it means!
https://secure.globeadvisor.com/serv...TNICK25ART1922
Last edited by Aviator; Aug 5th 2009 at 8:08 pm.
#15
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Joined: Jul 2009
Location: Canada
Posts: 169
Re: Selling house in Canada before moving back to Ireland
Better still, I would go straight to the horses mouth and get the real answer for free - the CRA (the revenue Canada tax office in your area)
http://www.cra-arc.gc.ca/cntct/tso-bsf-eng.html
click on the area find the office and call them, if need be go to them directly