Subsection 128.1(1) - Immigration
Administrative Policy
17 June 2014 External T.I. 2013-0506731E5 - Immigration
An individual shareholder immigrates to Canada, thereby becoming a Canadian resident, and then receives $1,000 from a wholly-owned non-resident...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Payment & Receipt | note satisfied dividend | 83 |
| Tax Topics - Income Tax Act - Section 90 - Subsection 90(2) | dividend not recognized until paid | 180 |
5 December 2013 External T.I. 2013-0485661E5 - U.K. ISA held by a temporary resident of Canada
A UK resident who opened up a a U.K. Investment Savings Account (ISA) which, as a Stock and Shares ISA, invested in shares of non-Canadian...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(4) - Paragraph 128.1(4)(b) | UK ISA held while temporary Canadian resident | 88 |
1999 APFF Round Table, Q. 1 (No. 9M19190)
Where an American citizen receives stock options from an American public corporation while working for it and living in the United States, and...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 7 - Subsection 7(1) - Paragraph 7(1)(a) | 46 |
Articles
Jack Bernstein, "Impact of Canada's Draft Tax Legislation on Taxpayer Migration", Tax Profile, Vol. 5, No. 30, February 1999, p. 341.
Jack Bernstein, "A Guide for the Emigrating Canadian Resident", 1993 Corporate Management Tax Conference Report, c. 12.
Lanthier, "Corporate Immigration, Emigration, and Continuance", 1993 Corporate Management Tax Conference Report, c. 4.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 128.2 - Subsection 128.2(1) | 0 | |
| Tax Topics - Income Tax Act - Section 219.1 | 0 | |
| Tax Topics - Income Tax Act - Section 250 - Subsection 250(5.1) | 0 |
Richards, "Exit Tax: Corporate Emigration and a Continuance", Canadian Current Tax, August, 1993, p. J13.
Flatters, "Proposed Amendments Relating to Corporate Continuance and Residence", 1993 Canadian Tax Journal, No. 3, p. 567.
Paragraph 128.1(1)(a)
Administrative Policy
14 November 2003 External T.I. 2003-0013445 F - Application de 94(1) et 128.1(1)
A non-resident trust deemed by s. 94(1)(c) to be a person resident in Canada throughout its 2001 taxation year had its non-resident trustees...
Paragraph 128.1(1)(b)
Administrative Policy
S3-F4-C1 - General Discussion of Capital Cost Allowance
Deemed acquisition
1.52 After 1992, where a taxpayer becomes a resident in Canada and owns depreciable property in a foreign country, pursuant to...
30 September 2011 Internal T.I. 2011-0402871I7 - Taxation of accrued interest on immigration
What is the tax treatment of interest on an investment contract that accrued but was not payable while the individual was a non-resident, and the...
11 October 2001 External T.I. 2001-0100245 F - POLICE EXEMPTEE ASSUREUR NON-RESIDENT
Regarding a life insurance policy issued by a non-resident insurer to a non-resident policyholder who then immigrates to Canada, CCRA...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Regulation 306 - Subsection 306(1) | information required to verify that a policy issued by a non-resident insurer is an exempt policy does not exist | 83 |
30 October 2000 External T.I. 2000-0013255 - PRODUCT ISSUED BY FOREIGN INSURER
In responding to a query respecting a particular investment product acquired by a non-resident individual from a non-resident insurer where the...
Subparagraph 128.1(1)(b)(iv)
Administrative Policy
14 May 2010 External T.I. 2009-0323151E5 F - Cross Border Stock Option
An individual, who had been granted stock options by Chinaco as an employee, immigrated to Canada to work for a Canadian affiliate at a time that...
Paragraph 128.1(1)(c)
Cases
Landbouwbedrijf Backx B.V. v. Canada, 2019 FCA 310
When a Netherlands couple immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm was held in a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | notwithstanding sole Netherlands director, decision-making was made by the shareholders in Canada | 169 |
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | potential relief under Dutch Treaty needed to be addressed even for mooted dual resident who had not been agreed by competent authorities to be a Dutch resident | 313 |
See Also
Landbouwbedrijf Backx B.V. v. The Queen, 2021 TCC 2
When a Netherlands couple immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm was held in a...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | Dutch legal expert testimony was required in order to establish dual corporate residency - and failure to engage competent authorities | 632 |
| Tax Topics - General Concepts - Estoppel | Minister not precluded from reassessing contrary to initial acceptance of non-residency in returns as filed | 109 |
| Tax Topics - General Concepts - Evidence | need to adduce expert legal evidence as to tax residency in foreign jurisdiction | 88 |
Landbouwbedrijf Backx B.V. v. The Queen, 2018 TCC 142, confirmed on s. 2(1) grounds, remitted for reconsideration on s. 128.1(1)(c) and Treaty grounds 2019 FCA 310
When a Netherlands couple (the Backxes) immigrated to Canada in 1998 to acquire a dairy farm here, they created a structure under which the farm...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | the central management and control of a B.V. with a sole Dutch director was in Canada | 319 |
| Tax Topics - Treaties - Income Tax Conventions - Article 4 | Netherlands corporation with central management and control in Canada was not resident in the Netherlands for Treaty purposes | 443 |
Administrative Policy
17 February 2022 External T.I. 2021-0882401E5 - Immigration and foreign life insurance policy
At the time a non-resident individual immigrated to Canada, the individual owned shares of a non-resident corporation which was the policyholder...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 70 - Subsection 70(5.3) | the CSV-valuation rule in s. 70(5.3) applies to a foreign life insurance policy of a non-resident corporation whose shares were held by an immigrating individual | 178 |
15 April 2003 External T.I. 2002-0139305 F - Immigration
At the time of his immigration to Canada in 1988, Mr. X held a 1/2 undivided interest in a US rental property with an FMV of Cdn.$650,000 (his...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 126 - Subsection 126(1) | FTC can be generated where recapture of depreciation, and denied capital loss, are realized on a US rental building | 67 |
| Tax Topics - Income Tax Act - Section 53 - Subsection 53(1) - Paragraph 53(1)(e) - Subparagraph 53(1)(e)(i) | step-up of partnership interest on immigration to Canada neutralized the capital gain on partnership property when partnership wound up | 146 |
Paragraph 128.1(1)(c.1)
Articles
Ron Choudhury, Neil Gurmukh, "Tax Issues on Immigration to Canada", Tax Topics (Wolters Kluwer), No. 2323, 15 September 2016, p. 1
Purposes of ss. 128.1(1)(c.1) and (c.2) (p. 3)
Paragraph 128.1(1)(c.1) provides for a deemed dividend to the immigrating corporation if the...
Paragraph 128.1(1)(d)
Articles
Brian Kearl, Carl Deeprose, "Leaving Canada's New High Tax Rate Regime: Considerations, Tips and Traps", 2016 Conference Report (Canadian Tax Foundation),32:1-24
General effect of the s. 128.1(1)(d)(iii) limitation (p. 32:13)
[T]he emigrating individual may elect to expand the application of the deemed...
Subsection 128.1(4) - Emigration
Administrative Policy
2020 Ruling 2019-0817051R3 - Reorganization
Following a pre-closing reorganization, including an amalgamation of Canadian corporations within the same group to form Parent Amalco, all the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 89 - Subsection 89(1) - Paid-Up Capital | transactions to increase PUC of shares of Cdn parent in sub before re-domestication of parent | 388 |
May 1999 CALU Conference No. 9908430 Q. 12
Discussion of guidelines for determining the circumstances in which RC will accept shares of a private company as security.
5 November 1996 External T.I. 9634595 - DISPOSITION OF A LIFE INSURANCE POLICY - EMIGRATION
Discussion of deemed disposition of a life insurance policy.
Articles
Firoz Talakshi, Patrick A. Jackman, "Corporate Migration: A Comparison of Canadian and US Income Tax Rules", 2001 Conference Report.
Cindy Rajan, "Are You Sure You Want To Leave Canada? The New Taxpayer Migration Rules", Personal Tax Planning, 1999 Canadian Tax Journal, Vol. 47, No. 5, p. 1342.
Lee, "Dear Departures", CA Magazine, November 1997, p. 26.
Parks, "New Departure Tax Rules and Related Proposals Create Problems", International Tax Planning, Vol. VI, No. 1, 1997, p. 373.
Couzin, "Departure Tax - Individuals", Bureau for International Fiscal Documentation, Vol. 49, No. 11, p. 532.
Bowman, "Sophisticated Estate-Planning Techniques: Cross-Border Dimensions", 1993 Conference Report, c. 38.
Paragraph 128.1(4)(b)
See Also
Barwicz v. The King, 2024 CCI 93
The taxpayer was one of nine beneficiaries of a discretionary inter vivos personal trust which ceased to be resident in Canada on December 17,...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) - Paragraph 160(1)(e) | a distribution by a discretionary trust in satisfaction of a capital interest occurred for no consideration for s. 160 purposes | 392 |
| Tax Topics - Income Tax Act - Section 94 - Subsection 94(3) - Paragraph 94(3)(a) | s. 94(1)(c) did not change the shortened taxation year arising under s. 128.1(4)(a) | 229 |
| Tax Topics - General Concepts - Fair Market Value - Other | capital interest in discretionary personal trust had nil value | 157 |
Administrative Policy
21 April 2015 External T.I. 2013-0494251E5 - 128.1(4) and Part XIII tax on future payments
At the time of his emigration from Canada to the US, "Mr. X" was entitled to the "Payments" from a Canadian resident who had purchased a client...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 212 - Subsection 212(1) - Paragraph 212(1)(d) - Subparagraph 212(1)(d)(v) | client list utilization payments to U.S. resident | 137 |
| Tax Topics - Treaties - Income Tax Conventions - Article 12 | client list utilization payments to U.S. resident | 180 |
5 December 2013 External T.I. 2013-0485661E5 - U.K. ISA held by a temporary resident of Canada
A UK resident who opened up a a U.K. Investment Savings Account (ISA) which, as a Stock and Shares ISA, invested in shares of non-Canadian...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 128.1 - Subsection 128.1(1) | step-up of shares in UK ISA | 91 |
13 September 2012 CICA Roundtable Q. 7, 2012-0453111C6 - CICA Conference Q7 - Alter ego trust
In response to a query as to whether a taxpayer is deemed pursuant to s. 128.1(4)(b) to dispose of his or her interest in an alter-ego trust upon...
17 November 2005 External T.I. 2005-0118101E5 F - Disposition réputée
A taxpayer was deemed to realize a capital loss pursuant to s. 128.1(4)(b) on ceasing to be resident in Canada, which would be a business...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 39 - Subsection 39(1) - Paragraph 39(1)(c) - Subparagraph 39(1)(c)(ii) | no BIL can arise from a deemed disposition and reacquisition | 77 |
15 December 2004 External T.I. 2004-0081411E5 F - Société étrangère
A resident individual (Mr. X), after owning for 10 years 60% of the shares of a foreign corporation earning all its income from foreign sources...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 91 - Subsection 91(1) | overview of FAPI rules/ rules in ss. 15(1), 56(2) or 246(1) apply in addition | 53 |
25 September 2003 External T.I. 2002-0180905 F - Cessation de résidence-Conséquences fiscales
CCRA provided a review of the consequences of a Canadian resident becoming a resident of Switzerland while holding qualified small business...
Articles
David M. Sherman, Bal Katlai and Kenneth Keung, "Can an Unpaid Dividend Avoid Departure Tax?", Tax for the Owner-Manager, Vol. 24, No. 1, January 2024, p. 9
Suggested avoidance of exit tax through declaration of dividend (p. 9)
- Some have suggested that the planners believe that the s. 128.1(4)(b)...
Subsection 128.1(6) - Returning former resident
Paragraph 128.1(6)(c)
Administrative Policy
30 July 2015 External T.I. 2013-0494871E5 - Paragraph 128.1(6)(c)
A former resident of Canada (the "Individual") who had continuously owned shares of a corporation (the "Shares"). At the time of his emigration...
Subsection 128.1(8) - Post-emigration loss
Administrative Policy
24 October 2013 External T.I. 2013-0486321E5 - Former taxable Canadian property and 128.1(8).
When Mr. X emigrated from Canada after 1 October 1996, he elected under s. 220(4.5) to defer the payment of the tax resulting from the deemed...
Subsection 128.1(10) - Definitions
excluded right or interest
(c)
Administrative Policy
26 February 2014 External T.I. 2013-0487961E5 - Excluded Right or Interest
A senior employee of Canco, who is entitled to receive "free shares" from treasury as determined by management, with a vesting period of 4 to 6...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Treaties - Income Tax Conventions - Article 15 | apportionment of stock option benefits based on situs of employment during vesting period | 213 |