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What are the tax implications to my Canadian corporation if I live outside Canada?
Posted by admin on Nov 15th, 2008
DM asked:
I have been a Canadian resident and own a Canadian corporation. Now, I am getting to my retirement age, and wish to live somewhere outside Canada where the climate is warm and no snow. I would ask my son-in-law to take care of my business when I live south.
I have been a Canadian resident and own a Canadian corporation. Now, I am getting to my retirement age, and wish to live somewhere outside Canada where the climate is warm and no snow. I would ask my son-in-law to take care of my business when I live south.
If you temporarily live outside canada, but stay in canad majority of time, and remain a canadian resident, there is no tax implications.
On the other hand, if you cut off all your canadian ties (without a cdn home, without social ties, and moving all your bank accounts down to where u live, etc), you may be considered as a cdn non resident. As such, your cdn coroporation may no longer be eligible for the cdn small business deduction, and there may be a deemed disposition of your shares of your corporation upon your leaving canada. Selling your shares while a cdn resident may allow you to have the tax exempt capital gains up to $500K on selling the shares.
You should seek tax advice before you move south permanently.