19 March 2003 External T.I. 2003-0002595 - Emigration from Canada

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

PRINCIPLE ISSUES: Emigration from Canada

Position: None.

Reasons: No hypothetical facts submitted.

XXXXXXXXXX Suzanie Chua
2003-000259
March 19, 2003

Dear XXXXXXXXXX:

Re: Emigration from Canada

This is in reply to your letter of February 11, 2003, regarding the above noted subject matter. We note that you have attached a completed Form NR73 Determination of Residency Status. As those forms are reviewed by the International Taxation Office of the Canada Customs and Revenue Agency which is located at 2204 Walkley Road, Ottawa, ON K1A 1A8, we have taken the liberty of referring your Form NR73 there. In the meanwhile, we are attaching a copy of Interpretation Bulletin IT-221R3 which sets out factors that are relevant in the determination of your residency status.

Our Comments

With respect to the tax consequences where a Canadian resident ceases to be resident in Canada, we can advise that subsection 128.1(4) of the Income Tax Act (the "Act") is applicable. In very general terms, a person will be deemed to have disposed of all properties except:

• real property situated in Canada, Canadian resource properties and timber resource properties, and property used in a business carried on through a permanent establishment in Canada;
• pension and similar rights (RRSPs, etc.);
• where the taxpayer is not a trust and was not during the 120-month period that ends at the particular time, resident in Canada for more than 60 months, property that was owned by the taxpayer at the time the taxpayer last became resident in Canada or that was acquired by the taxpayer by inheritance or bequest after the taxpayer last became resident in Canada;
• stock options subject to Canadian tax; most rights to benefits under employee benefit plans, etc.;
• trust interests that were not acquired for consideration; and
• life insurance policies (other than segregated fund policies).

Canadian income tax consequences will result from such deemed disposition of assets that may generate some tax liability.

We trust that the foregoing will be of assistance to you.

Yours truly,

Olli Laurikainen
Section Manager
for Division Director
International & Trusts Division
Income Tax Rulings Directorate
Policy and Legislation Branch
- 2 -