Ch. 2 - Liability for Tax

Question 1

Residency - Primary Ties

Individual

Answer 1

1. Dwelling place in Canada maintained for taxpayer
2. Spouse or common-law partner (unless divorced)
3. Dependants of the taxpayer

Question 2

Residency - Secondary Ties

Individual

Answer 2

1. Personal property kept in Canada
2. Social ties
3. Economic Ties
4. Others (seasonal dwellings, drivers licences, CDN passport)

Question 3

Residency - Temporary Absence

Individual

Answer 3

The CRA will look at:

1. Intention to return
2. Visits by the taxpayer
3. Residential ties outside Canada

Question 4

Deemed Residents
1. how taxed
2. Types of deemed residents
(Individual)

Answer 4

1. taxed for full year on worldwide income
2. a) sojourns in Canada for 183 days or more (in and out)
   b) A member of CDN armed forced
   c) Ambassador, minister officer of Canada

Question 5

Sojourners vs Part Time Residents

Individual

Answer 5

1. Sojourner - in/out of Canada, and in for over 183 days a year. Taxed on worldwide income for the year
2. Part-Time - someone who becomes, or stops being, a resident of Canada in the year. Taxed on worldwide income for the period they are a resident

Question 6

Date of becoming a non-resident

Individual

Answer 6

The later of:

1. date they leave Canada
2. date spouse/dependants lease Canada
3. date they become a resident of the new country

Question 7

Tax consequences of ceasing to be a resident

Individual

Answer 7

• There is a deemed disposition of asset at FV, exception include:
  1. CDN real property
  2. business property
  3. registered pension plans

Question 8

Taxation of non-residents

Individual

Answer 8

taxed on:

1. employment in Canada
2. Business carried on in PE in Canada
3. Disposed of taxable CDN property (CDN real property or business property)

Question 9

Deemed Resident of Canada

Corporation

Answer 9

A corp is a deemed resident if:

1. was incorporated in Canada, or
2. was incorporated in Canada and carried business outside Canada

Question 10

Resident of Canada under common-law principle

Corporation

Answer 10

corp will be CDN resident if central mgmt and control is located in Canada

Question 11

Liability of non-resident corporations for CDN tax

COrporation

Answer 11

if non-resident corp has a PE, it will be liable for tax on CDN-source business income