Corporation

A corporation ceases to be a resident of Canada:

  • If they are incorporated – when they file articles of continuance to change the jurisdiction of the corporation.
  • If they are not incorporated – then by moving the central management of the corporation to¬†outside Canada.

Impact on Tax

When they cease to become resident of Canada for income tax purposes then there will be deemed year-end immediately prior to ceasing residence and corporation has to complete financial books of accounts and has to file the income tax return for the deemed year-end date.

 

Trust

Trust ceases to be a resident of Canada:

  • When they change Canadian resident trustee and appoint non-resident trustee
  • By holding all the trust meeting outside Canada

 




Individual

Individual ceases to be a resident of Canada:

  • When they sold the home or canceled the lease for the house for his/her dwelling in Canada
  • When his/her immediate family moved out of Canada
  • When he/she becomes the resident of another country for tax purposes

Impact on Tax

  • When an individual ceases to become resident of Canada for income tax purposes, then the taxpayer is deemed to have disposed of all properties, immediately prior to ceasing residence for proceeds equal to fair market value. These dispositions will trigger any gains and losses and the taxpayer has to pay taxes on the gains. Any gains or losses after the deemed disposition will not be subject to tax in Canada.
  • Personal Tax Credit will be prorated for the part of the year based on his/her presence in Canada.