Residence (individual) Flashcards
Three concepts of residency:
- resident
- deemed resident
- non-resident
What factors determine:
Significant residential ties
- dwelling place
- spouse or common-law partner
- dependents
What are the 10 factors that determine:
Secondary residential ties
- personal property in Canada
- social ties with Canada
- economic ties with Canada
- landed immigrant status or appropriate work permits
- hospitalization and medical insurance coverage from Canada
- driver’s license from Canada
- vehicle registration in Canada
- seasonal dwelling place in Canada
- Canadian passport
- memberships in Canadian union or professional organization
List six
Other residential ties of limited importance
- retention of Canadian mailing address
- Canadian post office box
- Canadian safety deposit box
- personal stationery or business cards showing Canadian address
- telephone listing in Canada
- Canadian newspaper and magazine subscriptions
What are the three factors to consider in the
Nature of absence from Canada
- evidence of intention to permanently sever ties with Canada
- regularity and length of visits to Canada
- residence ties outside of Canada
Why is the concept of residency important?
The concept of residency
- determines under what Part of the ITA (if any) a person’s income is taxed:
- A person who is resident in Canada is liable for Part 1 tax on his worldwide income.
- A non-resident is only taxed on income earned in Canada
- Residency is not based on physical presence in Canada (except for deemed residency).
- The main factor for determining if a person is a resident of Canada for income tax purposes is if that person maintains social ties with Canada (IT221R3)
Deemed full-time resident
- if ‘sojourned’ in Canada for an aggregate of 183 days or more.
- The word ‘sojourn’ has the connotation of a temporary visit.
- A deemed resident is determined based on physical presence in Canada
- A deemed resident means that an individual is deemed to be a resident of Canada for the entire year even if sojourned in Canada for only a part of the year (but at least 183 days or more)
Common law concept of full-time resident
- Residence is described as “a continuing state of relationship between a person and a place which arises from the durable concurrence of a number circumstances.
- A person’s ties to a country need not be manifested in a permanent home.
- An individual must be resident in at least one country at any moment in time.
- A degree of permanence and substance has to be present to create the status of “resident”
Part-Year Resident
- This describes the position of an individual in the year he or she either became or ceased to be a Canadian resident.
- The year of exit or entry is the year of part-year residence status.
- taxed on worldwide income earned during part of year in which he or she was resident in Canada.
When does a clean break occur?
Part-year resident: Clean break
Clean break occurs on the latest of the date on which:
- the individual leaves Canada,
- the individual’s spouse or common-law partner and/or dependants leave Canada, or
- the individual becomes a resident of the country to which he or she is immigrating.
When does a fresh start occur for a part-year resident?
Part-year resident: fresh start
A fresh start occurs:
- when a non-resident person moves to Canada to take up residence
- the person would be in Canada for more than 183 days. (The part-year consists of more than 183 days.)
- the stay for the period is not temporary (as it is in a deemed full-year resident sojourning an aggregate of 183 days or more).
What is a non-resident?
A person who is not a resident or deemed resident.
Liability of non-resident person
A non-resident person may be liable for Part 1 tax only if:
- he was employed in Canada
- he carried on a business in Canada, or
- he disposed of a taxable Canadian property [subsection 2(3)
