A company is considered to have immigrated to Canada if the corporation’s central management and control has moved to Canada, regardless if initially incorporated in Canada or not. Therefore, when a business owner moves to Canada, so does the business.

When the company enters Canada, the company is deemed to have disposed of and reacquired all of the company’s assets and liabilities at their fair market value (FMV) right before coming to Canada. As the assets and liabilities of the company are being re-valued at the FMV, this is considered to be the company’s valuation date. Read More

Like many countries. Canada taxes non-residents who realize gains on real estate located within its borders(1).

This will be true whether the real estate is capital property that is held for the purposes of earning from rental or a business; capital property held for personal use; or inventory of a business (e.g. where it is held for resale).

This article will focus on situations where the real estate is capital property.

The Income Tax Act (“the Act”) provides that non-residents are subject to tax in Canada on taxable gains from the “disposition” (which can include sales, as well as other events deemed to be dispositions, such as death) of “taxable Canadian property” (“TCP”)(2). TCP Read More

In certain cases, a distribution of capital by a trust(1) to a non-resident beneficiary will bring into play certain notification and tax clearance requirements found in subsection 116.

As a general rule, a distribution of capital by a trust to a beneficiary is considered a “disposition” by that beneficiary of all or a portion of that beneficiary’s capital interest in the trust(2).

If the interest of the beneficiary is “taxable Canadian property” (“TCP”), the beneficiary will be required to send a notification of such disposition to the Canada Revenue Agency (“CRA”) within 10 days after the disposition(3). In addition, the CRA takes the position that the trust itself can be liable for tax, in such circumstances, if a tax clearance is not Read More