COVID and the housing market

[Lightcycle]

What exit taxes are you talking about? I’ve moved abroad twice, I don’t recall paying an exit tax. I did have to liquidate rrsp accounts which hurt, but there wasn’t really a loss as I didn’t pay tax on that money.

There is no exit tax.

There are two different ways to sever ties to Canada:

1. Renounce your residency
2. Renounce your citizenship

Both require you to liquidate or assess your Canadian assets at Fair Market Value and pay whatever capital gains taxes are owed to government. Also settle your income tax bill before you leave. Most people who do not have real estate investments or stocks, and have income tax deducted at source by their employer will probably not pay any taxes at all when they renounce residency/citizenship. Principal real estate cap gains exemption still holds.

 

[nobbie48]

Odd. I have family who are dual citizens.

Scheer, who was the former leader of the Conservative party is a dual citizen.

Ditto my S-I-L and her family.

An American I know, living here for ages wants to drop his US citizenship but the US is giving him a hard time because they get some tax money IIRC.

 

[nobbie48]

That's not poor education.

That's just poor impulse control.

You could stand outside those cheque cashing places and try to tell people how they're being taken advantage of, and they'll just push past you and still take that payday loan.

Mama needs a new pair of shoes, ain't nobody with a blackboard and chalk gonna stand in her way!

IMO the best educator out there is electricity. Stick your finger in a live light socket once and you never do it again. It doesn't care about race, age, culture or sexual orientation. Unfortunately social norms don't allow it as a teaching tool.

 

[Superveloce]

What exit taxes are you talking about? I’ve moved abroad twice, I don’t recall paying an exit tax. I did have to liquidate rrsp accounts which hurt, but there wasn’t really a loss as I didn’t pay tax on that money.

i work for an international company, I can relocate anywhere, anytime. If I could convince my wife to go, I’d be in Florida tomorrow.

What exit taxes are you talking about? I’ve moved abroad twice, I don’t recall paying an exit tax. I did have to liquidate rrsp accounts which hurt, but there wasn’t really a loss as I didn’t pay tax on that money.

i work for an international company, I can relocate anywhere, anytime. If I could convince my wife to go, I’d be in Florida tomorrow.

Departure tax for individuals emigrating from Canada

Without careful tax planning, taxpayers may be caught off guard with a tax obligation that they do not have the resources to pay.

rsmcanada.com

Canadian Departure tax Rules

Who has to pay Departure Tax? Departure tax is levied by the Canada Revenue Agency (CRA) on individuals leaving Canada and severing their ties with

madanca.com

 

[Superveloce]

did you put someone on ignore by chance? ?

He doesnt read ...just reacts

 

[Superveloce]

There is no exit tax.

There are two different ways to sever ties to Canada:

1. Renounce your residency
2. Renounce your citizenship

Both require you to liquidate or assess your Canadian assets at Fair Market Value and pay whatever capital gains taxes are owed to government. Also settle your income tax bill before you leave. Most people who do not have real estate investments or stocks, and have income tax deducted at source by their employer will probably not pay any taxes at all when they renounce residency/citizenship. Principal real estate cap gains exemption still holds.

Wrong ....You just said there is no exit tax while explaining you have to pay tax when you leave .....is it better if we call it a departure tax for you?

Canadian Departure tax Rules

Who has to pay Departure Tax? Departure tax is levied by the Canada Revenue Agency (CRA) on individuals leaving Canada and severing their ties with

madanca.com

Departure tax for individuals emigrating from Canada

Without careful tax planning, taxpayers may be caught off guard with a tax obligation that they do not have the resources to pay.

rsmcanada.com

 

[Lightcycle]

Wrong ....You just said there is no exit tax while explaining you have to pay tax when you leave .....is it better if we call it a departure tax for you?

It's not a special tax, it's settling the bill for what is owed. Everybody eventually pays it.

It's like paying for your meal before you leave the restaurant. It's just that most Canadians never leave the restaurant until their dying day, and the bill is settled out of their estate when their final income tax return is filed.

 

[Superveloce]

It's not a special tax, it's settling the bill for what is owed. Everybody eventually pays it.

It's like paying for your meal before you leave the restaurant. It's just that most Canadians never leave the restaurant until their dying day, and the bill is settled out of their estate when their final income tax return is filed.

No it isn’t you’re wrong again. I’m forced to sell off assets or valuate them and then pay taxes on them to leave the country even if I don’t want to sell them. You don’t understand the departure tax at all you should read the links I gave you

 

[GreyGhost]

It's not a special tax, it's settling the bill for what is owed. Everybody eventually pays it.

It's like paying for your meal before you leave the restaurant. It's just that most Canadians never leave the restaurant until their dying day, and the bill is settled out of their estate when their final income tax return is filed.

And if you look at it that way and expect taxes to spike in the future, paying it now at a lower rate with less capital makes a lot more sense than in the future with more capital at a higher rate (financially, obviously there are other residency/citizenship inplications).

 

[GreyGhost]

No it isn’t you’re wrong again. I’m forced to sell off assets or valuate them and then pay taxes on them to leave the country even if I don’t want to sell them. You don’t understand the departure tax at all you should read the links I gave you

How is that different than dying? It can trigger a bill you dont have the cash to pay without selling assets you dont want to sell though. Royal plastics had a liquidity crunch when a janitor retired who had been there from the beginning and de zen had given him a percentage of the company. The janitor happily worked for his whole career and at retirement when he was cashing out, that stake was 8 or 9 digits.

 

[Lightcycle]

No it isn’t you’re wrong again. I’m forced to sell off assets or valuate them and then pay taxes on them to leave the country even if I don’t want to sell them. You don’t understand the departure tax at all you should read the links I gave you

If you're severing ties from Canada, how can the government reasonably expect to recoup capital gains and other income taxes from you?

A promise to pay it when you finally do liquidate those assets when you're nestled in your villa in Italy?

Pinky-swear? Cross-your-heart?

 

[Lightcycle]

How is that different than dying? It can trigger a bill you dont have the cash to pay without selling assets you dont want to sell though. Royal plastics had a liquidity crunch when a janitor retired who had been there from the beginning and de zen had given him a percentage of the company. The janitor happily worked for his whole career and at retirement when he was cashing out, that stake was 8 or 9 digits.

Being forced to make annual minimum withdrawals from your RRSPs at age 71 is another example of triggering a tax bill against your wishes.

 

[Superveloce]

If you're severing ties from Canada, how can the government reasonably expect to recoup capital gains and other income taxes from you?

A promise to pay it when you finally do liquidate those assets when you're nestled in your villa in Italy?

Pinky-swear? Cross-your-heart?

It’s a forced sale. If I don’t want to sell my assets why do I have to pay tax on them? Wait until I actually sell them or die.
and you don’t think there are lawyers involved and accountants when you sell an asset and that the transfer of ownership , title or movement of cash overseas isn’t monitored?

 

[Superveloce]

How is that different than dying? It can trigger a bill you dont have the cash to pay without selling assets you dont want to sell though. Royal plastics had a liquidity crunch when a janitor retired who had been there from the beginning and de zen had given him a percentage of the company. The janitor happily worked for his whole career and at retirement when he was cashing out, that stake was 8 or 9 digits.

Because I’m not dead and I’m not wanting to sell my assets but I’m being forced to pay tax as if I did die or sell them. And there are estate planning ways to kick that tax down the road when you die

 

[Superveloce]

Being forced to make annual minimum withdrawals from your RRSPs at age 71 is another example of triggering a tax bill against your wishes.

in that case I am actually withdrawing money. In the departure tax case I am getting nothing but a tax bill on assets I am not selling or cashing out on .

 

[Lightcycle]

in that case I am actually withdrawing money.

No necessarily. If you don't need the cash, you can transfer your assets in-kind from an RRSP to a non-registered account. It's not a sale of the assets as they remain the same as before, but it's a triggered tax bill on the FMV nonetheless.

It's actually very similar to the kind of assessment when you renounce residency/citizenship.

 

[Robbo]

Because I’m not dead and I’m not wanting to sell my assets but I’m being forced to pay tax as if I did die or sell them. And there are estate planning ways to kick that tax down the road when you die

The article you referenced mentions that you can defer those taxes until the assets are actually sold. Maybe something you want to look into.


Sent from my iPhone using Tapatalk

 

[Superveloce]

No necessarily. If you don't need the cash, you can transfer your assets in-kind from an RRSP to a non-registered account. It's not a sale of the assets as they remain the same as before, but it's a triggered tax bill on the FMV nonetheless.

It's actually very similar to the kind of assessment when you renounce residency/citizenship.

it isn’t at all. And you have gone from there is no departure tax to the tax is acceptable due to RRSP similarities .....which there aren’t . RRSP is tax deferral , exit tax is tax on assets you have not sold. And you don’t pay tax on your full RRSP amount if you do choose annuity or other . You really need to learn ...you are not correct

RRSP at 71

If you choose to withdraw the funds, they are added to your income and you must pay taxes on them. The rate of taxation varies depending on what other income you may have. If you are in a low-income tax bracket, this option may make sense for you. If you are in the higher brackets, consider the other choices as well.

First, you can use the funds to purchase an annuity. There are many types of annuities, but the basic rule in all of them is that you will receive a fixed monthly payment for a predetermined amount of time or for the rest of your life. That amount is taxable at your normal rate for the year when you receive it.

Your second choice is to transfer the funds to an RRIF. An RRIF is very similar to an RRSP in the way it functions, but you must withdraw a portion of it annually and pay taxes on the withdrawals. Otherwise, an RRIF can make the same investments as an RRSP and can be self-managed if you wish

RRSP Consequences of Turning 71 | 2023 TurboTax® Canada Tips

Find out how turning 71 impacts your Registered Retirement Savings Plan and the tax consequences of each of your options.

turbotax.intuit.ca

 

[Superveloce]

The article you referenced mentions that you can defer those taxes until the assets are actually sold. Maybe something you want to look into.


Sent from my iPhone using Tapatalk

If allowed and you have to post collateral. So you are still encumbered, and I doubt CRA allows many of these deferrals

An individual can elect to defer payment of the departure tax until the asset is sold by filing an election, form T1244, no later than April 30th of the year after emigration. If the amount of tax owing is more than $16,500, security may need to be provided to the CRA. Typically, CRA will require a bank guarantee, letter of credit or a mortgage on real property.

 

[nobbie48]

The friend of a neighbour sold their place and is planning to rent for a year or so. They hope to take advantage of a market crash.