{"id":1724,"date":"2014-01-10T04:08:58","date_gmt":"2014-01-10T09:08:58","guid":{"rendered":"http:\/\/www.escapeartist.com\/?p=1724"},"modified":"2021-03-02T09:11:19","modified_gmt":"2021-03-02T14:11:19","slug":"living-bermuda-escaping-canada-embracing-bermuda","status":"publish","type":"post","link":"https:\/\/www.escapeartist.com\/blog\/living-bermuda-escaping-canada-embracing-bermuda\/","title":{"rendered":"Living in Bermuda: Escaping Canada and Embracing Bermuda"},"content":{"rendered":"

Living in Bermuda: Escaping Canada and Embracing Bermuda<\/strong><\/h2>\n

While the majority of articles on Escape Artist are written from the American perspective, I thought I would write a few words for the readers of Escape Artist from the perspective of your quiet neighbours from the North. I have been reading Escape Artist for several years now, and believe it\u2019s now time to give back a bit to the site that helped me come to the conclusion that leaving one\u2019s country permanently can be a great thing to do.<\/p>\n

Why leave Canada? \u00a0While we have a great standard of living, it comes at the expense of sky-high taxes.<\/p>\n

I personally prefer a less invasive and therefore less expensive form of government and, since I\u2019m no politician, I\u2019m not in any real position to change the system.<\/p>\n

That leaves two choices \u2013 endure it and stay, or, wave good-bye to the country of my birth. When the opportunity came to leave Canada, I embraced it wholeheartedly. \u00a0(And let\u2019s not forget the snow. \u00a0I\u2019m not a winter kind of person). For the past year, I have had the pleasure of calling myself an expat. I\u2019m not yet an expat retiree, but trust me, I\u2019m working on it.<\/p>\n

Last December, I, along with my wife and dog, packed it all up and moved from the Snowy North to Beautiful Bermuda. Why Bermuda? \u00a0There were many reasons, but most importantly, that\u2019s where the job offer was. \u00a0I hope to write quite a few articles about expat life in Bermuda in the coming months, and welcome your feedback on the articles.<\/p>\n

From the expat point-of-view, one of the best advantages of being a Canadian<\/a> (as compared to being American) is that it is much easier to shed one\u2019s residence, and therefore, tax obligation. \u00a0While there are many \u201ctests\u201d which the government uses to decide whether or not they still have a right to tax you as a resident, the challenge of losing Canadian tax residency can be simply solved by following the following golden rule:<\/p>\n

Sell everything, close all accounts, and act as if you\u2019re never coming back.<\/p>\n

You can change your mind later, but for all intents and purposes, you have to make like you\u2019re never coming back. \u00a0(After a year away, I can tell you, I don\u2019t plan to return to Canada except to visit family and friends maybe once a year!).<\/p>\n

The CCRA, formerly known as Revenue Canada, provides quite a bit of documentation online, and there are several factors that are used to determine whether you have successfully extricated yourself or not.<\/p>\n

I\u2019m not a lawyer! But, one of my coworkers talked to a tax lawyer before he too left Canada, and it was recommended that expats DO NOT submit the NR73 form.<\/p>\n

The lawyer explained that if you give CCRA the opportunity to deny your non-resident status, they are much more likely to do so than if you simply leave, declare that you have left Canada on your last tax return, and file no further returns. \u00a0You are not legally required to fill out the NR73, so I will leave it up to you.<\/p>\n

The increased scrutiny of the tax department of any country is not something many of us would want.<\/p>\n

I found this great podcast by The Expat Money Show<\/a> – Kristin Wilson<\/a> on being a digital nomad<\/strong><\/p>\n

This is the Canadian expat\u2019s tax bible. \u00a0In this 8 page document is everything you need to legally escape the Canadian tax system. My favourite line is in Paragraph 2: \u201cThe term \u201cresident\u201d is not defined in the Income Tax Act.\u201d \u00a0So, it\u2019s all a matter of interpretation! \u00a0However, there are several major and minor factors that CCRA will take into account when determining residency status:<\/p>\n

The Ties that Bind: Major Residential Ties<\/strong><\/h3>\n

1. A House<\/p>\n

2. A Spouse<\/p>\n

3. Children<\/p>\n

The House<\/strong><\/h3>\n

You don\u2019t have to sell your house, but it makes things easier.<\/p>\n

If you can rent out the house for enough to cover mortgage and taxes then it\u2019s certainly worth keeping. \u00a0You will likely owe capital gains taxes when you sell the house, as you\u2019re showing CCRA that you\u2019re non-resident. This one was a shocker to me.<\/p>\n

If you keep the house, make sure you lease it out to a third party at the going market rate, or better yet, hire a property management company to keep it rented out. \u00a0If you can terminate the lease without significant notice to the lessor, this could be contested by CCRA.<\/p>\n

The Spouse And The Kids<\/strong><\/h3>\n

Very simple \u2013 bring them with you! \u00a0IT-221 says that CCRA will deem you to have acquired non-resident status on the latest of<\/p>\n