Sail the world never pay taxes

[mrsCALoki]

There was a guy that died while doing just this a few yrs back. He had a blog of his adventures.

Doing what?

 

[Stoo]

That you think GPS is going to send position reports to tax authorities and not that you might use it to navigate makes me less than confident in your advice!

LOL What I was thinking. Simon is going to get a sun hat for use on his boat... and it's going to be made out of tin foil. That will stop CRA in its tracks.

 

[Stoo]

Oh et worth analysis sounds vicious.

A guy I knew went through this.... Very unpleasant. He managed a strip club and about 75% of his income was cash and undeclared. He had trouble explaing his mortgage, boat, vacations etc. on $30K a year. I think he ended up owing them something like $80K in taxes (which of course he didn't have.) The last I heard he was driving a tow truck, and a huge percentage of his pay was being garnisheed...

 

[Joey123]

That you think GPS is going to send position reports to tax authorities and not that you might use it to navigate makes me less than confident in your advice!

SchlongConery is no 007.

 

[mrsCALoki]

SchlongConery is no 007.

I guess not. Schlong seems to be a real person and keeps thinking of reality is real.

 

[mrsCALoki]

A guy I knew went through this.... Very unpleasant. He managed a strip club and about 75% of his income was cash and undeclared. He had trouble explaing his mortgage, boat, vacations etc. on $30K a year. I think he ended up owing them something like $80K in taxes (which of course he didn't have.) The last I heard he was driving a tow truck, and a huge percentage of his pay was being garnisheed...

My question were curiosity. I was told by someone who may or may not be right that the CRS was not looking at income from potentially illegal activities in Canada because of concerns over a court case re requiring someone to incriminate themselves. But if things like prostitution or drug sales became legal they would instantly start looking for the taxes, including back taxes. She told me she kept 30% a year in a seperate account for taxes and all her receipts in case. I have a horrible feeling that she was an accountant before she switched jobs

 

[lenny2]

Sadly if your income is from Canadian sources Canada will take their taxes off the top.

AFAIK, yes, for a declared Canadian tax non resident.

You have to be a resident of another country to be a non-resident for tax purposed.

Lenny, you need to get a very competent international tax lawyer and go through it one line at a time. My opinion (not a fact just an opinion based on a lot of things) Is that there is no way on earth that you can "e maintaining at least 5 bank accounts, 2 CCs & 2 bank cards with 2 Canadian banks. Maybe some personal belongings like clothes & furniture in storage. Also relatives living there along with ex wife receiving alimony payments." and have Canadian annuities and become a non resident.

I've read of others that agree with your first sentence. If that refers to tax residency, then what need would there be to see a tax lawyer, since i will not become a tax resident of another country?

When do you become a non‑resident? When you leave Canada to settle in another country, you usually become a non‑resident for income tax purposes on the latest of the following dates:

•the date you leave Canada;
•the date your spouse or common‑law partner and dependants leave Canada; or
•the date you become a resident of the country to which you are immigrating.

http://www.cra-arc.gc.ca/E/pub/tg/t4056/t4056-e.html

Resident? Refering to a tax resident? Usually?

"Generally, you become a deemed non‑resident at a time when your residential ties in the other country are such that, under the tax treaty between Canada and that country, you are considered to be a resident of that country and not of Canada."

http://www.cra-arc.gc.ca/E/pub/tg/t4056/t4056-e.html

10. Where an individual has not severed all of his or her residential ties with Canada, but is physically absent from Canada for a considerable period of time (that is, for a period of time extending over several months or years), the Courts have generally focused on the term "ordinarily resident" in determining the individual's residence status while abroad. The strong trend in decisions of the Courts on this issue is to regard temporary absence from Canada, even on an extended basis, as insufficient to avoid Canadian residence for tax purposes. Accordingly, where an individual maintains residential ties with Canada while abroad, the following factors will be taken into account in evaluating the significance of those ties:

(a) evidence of intention to permanently sever residential ties with Canada,
(b) regularity and length of visits to Canada, and
(c) residential ties outside Canada.

For greater certainty, the CCRA does not consider that intention to return to Canada, in and of itself and in the absence of any residential ties, is a factor whose presence is sufficient to lead to a determination that an individual is resident in Canada while abroad.

http://www.cra-arc.gc.ca/E/pub/tp/it221r3-consolid/it221r3-consolid-e.html#P79_7783

If you left Canada to work temporarily in another country and have maintained significant residential ties with Canada, you are considered to be a factual resident of Canada. This means that, although you left Canada, for expatriate income tax purposes you are regarded in fact to be a resident of Canada.

Other types of factual residents include those vacationing outside of Canada for extended periods of time, those teaching or attending school in another country, and those commuting to the U.S. and returning to Canada for work purposes on a daily or weekly basis.

http://www.hrblock.ca/services/filing_country.asp

Loki gave me a bit of gold as a wedding present. To be deemed non-resident I had to pay the capital gains on it and liquidate it. Also had to sell our vehicles and NOT have a residence.

So if someone owned a car, ring or property in Canada worth one dollar, this alone would cause them to be considered still having residential ties to Canada & a resident for tax paying purposes?

Sever Residential Ties to Canada -in order to do this you must close your bank accounts, cancel your provincial health insurance, let your club memberships expire and take any dependants and your spouse with you. Non-residency claims are considered on a case-by-case basis and just one major tie can be enough to prevent your claim from going through.

Make New Ties in Your New Country- the CCRA is weighing ties with your new country more and more heavily. It can only help your application to join a social or religious club and get on the property ladder as soon as possible.

...You should check your finances carefully however, since,RRSP withdrawals, pension payments and other dividends are subject to withholding taxes.

http://www.canuckabroad.com/international-banking/expat-tax-non-resident-status.html

Are you an emigrant?

Generally, you are an emigrant for income tax purposes if you leave Canada to settle in another country and you sever your residential ties with Canada. Severing your residential ties may include:
•disposing of or giving up a home in Canada and establishing a permanent home in another country;
•having your spouse or common‑law partner (see the definitions in the General Income Tax and Benefit Guide) or dependants leave Canada; and
•disposing of personal property and breaking social ties in Canada, and acquiring or establishing them in another country.

http://www.cra-arc.gc.ca/E/pub/tg/t4056/t4056-e.html

I suppose the gold you refer to comes under the "personal property" spoken of above.

I guess the basic rule of thumb that $500,000 of international income was the typical value where you should start thinking non-resident / boat life is a good guide line.

My resident expert says $200,000 to be a straight forward 6 month land liver is the rule of thumb for non-resident living.

But if you are near those values, go talk to an expert.

I wonder what the basis of these figures is. Personally i'm looking to keep my Canadian tax residency status, not lose it, in order to avoid paying 25% withholding tax instead of about 7% tax. I'd consider seeking non resident tax status if it could be worthwhile by lowering that 7% to little or nothing, e.g. if my Canadian sourced annuity income could be transferred elsewhere where it is not taxed. Maybe Hong Kong or one of those countries you spoke of earlier?

 

[CapitalGuy]

Oh thank you so much.

hun, I am sorry, I find money to be nice to have. If that is a personality flaw I do indeed have it.

We live on a boat because it was my man's fantasy all his life. I wanted him to have a chance to enjoy it for 5 years. So we are.

Culture? etc

Well last mooring was in South Harbour in down town London. They still have a little culture there. Before that Paris, etc

Oh on our way to Mardi Gras in New Orleans now.

The boat is just a house that lets us travel comfortably. For tax purposes is spend about six months in an wonderful, civilized and comfortable country. Living in a place people scrimp and save to visit for a few weeks is hardly a hardship. But it is not as much fun as visiting the world.

And I reached the end of my desire in reading a post by Fat man. So poof the end

Millions of dollars, a newborn baby, a rich husband, and he/she chooses to spend hours a day on TERB. Too dumb to spell properly and far too dumb to realize we can see right though the (previously admitted) fake persona. What a sad little bore you are.

 

[GPIDEAL]

Dont you know the 2 Universal laws?
1. Death and 2. Taxes

Even sailing the world on a boat, you will still need to register the boat (pay taxes registration and insurance) and need a dock slip (taxed avajn) to land for refueling or resupply.

Although the taxes maybe minimal, its still there.

I've always said that there are three: 1. Death 2. Taxes and 3. Alimony

 

[mrsCALoki]

I've read of others that agree with your first sentence. If that refers to tax residency, then what need would there be to see a tax lawyer, since i will not become a tax resident of another country?

lenny, if you are paying 7% Tax, you are not in the income range that needs to even consider non-residence status. If you are thinking of becoming a non-resident of most countries seeing a tax lawyer is imprtant to make certain you get it right because you get badly burnt if/when you return to Canada and revenue Canada goes after you for back taxes.

So if someone owned a car, ring or property in Canada worth one dollar, this alone would cause them to be considered still having residential ties to Canada & a resident for tax paying purposes?

Well according to the ruling we got somewhere between a dollar left here and a residence the Tax Man decides you are still a legal resident of Canada. Get a lawyer to find out where the line will be drawn for you. For us having a place to live was not allowed, and having vehicles was not allowed.

I suppose the gold you refer to comes under the "personal property" spoken of above.

Gold is an investment as all investments was deemed sold for tax purposes.

I wonder what the basis of these figures is. Personally i'm looking to keep my Canadian tax residency status, not lose it, in order to avoid paying 25% withholding tax instead of about 7% tax. I'd consider seeking non resident tax status if it could be worthwhile by lowering that 7% to little or nothing, e.g. if my Canadian sourced annuity income could be transferred elsewhere where it is not taxed. Maybe Hong Kong or one of those countries you spoke of earlier?

lenny, In all likely hood you will have no choice. If you are not making about $200k from international sources the legal costs to have the Tax people make an adjudication in writing before you go will cost more than you can save. If you are paying 7% on a Canadian annuity you are not in the tax range where it can be of benefit to you.

Also depending on the exact nature of your Canadian investments they typically get taxed as deemed sold when you leave the country. See a lawyer if you really care, but you are way below the income bracket (if you pay 7% tax) to worry about it.

Just go and play and have fun as a tourist. If you do not like it you can always go home.

 

[mrsCALoki]

I've always said that there are three: 1. Death 2. Taxes and 3. Alimony

There should be a proverb........ Pre-nup !

As for taxes, it cost money to not pay taxes. LOL

 

[Rockslinger]

Old Greek proverb: "Only fools pay taxes."

 

[Ed Thomas]

Doing what?

Just going from port to port and sightseeing. I think he was robbed and killed. It was in the news over a yr ago.

 

[mrsCALoki]

Just going from port to port and sightseeing. I think he was robbed and killed. It was in the news over a yr ago.

Oh. Sadly many parts of the world are just not safe. But then walking down a side street of Toronto displaying more wealth than the average person there could make in 10 years makes it unsafe. Same goes for having a Timex on your wrist in some places.

In small harbours away from civilization you can be a huge target.

 

[mrsCALoki]

Oh. Sadly many parts of the world are just not safe. But then walking down a side street of Toronto displaying more wealth than the average person there could make in 10 years makes it unsafe. Same goes for having a Timex on your wrist in some places.

In small harbours away from civilization you can be a huge target.

oh oh.... or Yonge St in Toronto where people get killed by stray bullets?

 

[danibbler]

Well according to the ruling we got somewhere between a dollar left here and a residence the Tax Man decides you are still a legal resident of Canada. Get a lawyer to find out where the line will be drawn for you. For us having a place to live was not allowed, and having vehicles was not allowed.

Yep. I've looked into this too.

Also depending on the exact nature of your Canadian investments they typically get taxed as deemed sold when you leave the country.

Yep.

Just go and play and have fun as a tourist.

Agreed.

I'm in Asia quite a bit...last year was in four different countries for months at a time and, frankly, only Singapore has top notch facilities but getting permanent residency there to the point where you have to pay their minimal taxes is now almost impossible.

 

[Rockslinger]

only Singapore has top notch facilities but getting permanent residency there to the point where you have to pay their minimal taxes is now almost impossible.

Singapore is really choosey about who they let in. Also, death penalty for drug smugglers. North Americans would never feel comfortable living there.

 

[lenny2]

Singapore is really choosey about who they let in. Also, death penalty for drug smugglers. North Americans would never feel comfortable living there.

The clincher for me was chewing gum being illegal.

NAs would never feel comfortable there because it's so safe & has red light areas.

 

[lenny2]

Lenny, you need to get a very competent international tax lawyer and go through it one line at a time. My opinion (not a fact just an opinion based on a lot of things) Is that there is no way on earth that you can "e maintaining at least 5 bank accounts, 2 CCs & 2 bank cards with 2 Canadian banks. Maybe some personal belongings like clothes & furniture in storage. Also relatives living there along with ex wife receiving alimony payments." and have Canadian annuities and become a non resident.

According to this opinion one can be declared a tax non resident of Canada and still have "minor attachments such as a bank account" and even own a house:

"I'm also from Canada a planning to retire in Thailand within 6-12 months. I have also been grappling with the banking and, more importantly, the taxation issues. I will also receive an extremely generous SA pension and have come to the conclusion that the most tax beneficial way is to become a non-resident of Canada. This means severing all residential ties to Canada i.e. Canadian driver's licence, house unless rented non-arm's length on long term lease, furniture (no storage; but who's to know if you leave it with the kids), provincial medical coverage etc. However, they will allow minor attachments such as a bank account. Our Revenue Agency is very fickle and prone to irrational and incorrect assessment so it's safer to minimise your residency ties. In other words, you have to show that you have no intention of coming back....the key word is "intent". You will NEVER lose your citizenship unless you renounce it."

http://www.expatforum.com/expats/th...s-living-thailand/118541-canadian-expats.html

lenny, if you are paying 7% Tax, you are not in the income range that needs to even consider non-residence status.

I doubt my Canadian sourced annuity income could become income from another country anyway, though it would do no harm to ask the annuity companies about that.

If you are thinking of becoming a non-resident of most countries seeing a tax lawyer is imprtant to make certain you get it right because you get badly burnt if/when you return to Canada and revenue Canada goes after you for back taxes.

I'm concerned i'll get badly burned by Revenue Canada declaring me a non-resident & charging me 25% in taxes, when i continued to file as a resident paying my present 7% in taxes. Note that in the above quote it says they are "very fickle and prone to irrational and incorrect assessment so it's safer to minimise your residency ties". In my case it might be safer to maximize my residency ties.

Well according to the ruling we got somewhere between a dollar left here and a residence the Tax Man decides you are still a legal resident of Canada.

Did the "Tax Man" decide this "ruling" upon any clear, definitive, objective and publicly written rules, or was it more like they were being "very fickle and prone to irrational and incorrect assessment", one which you could have taken to court and won?

Get a lawyer to find out where the line will be drawn for you. For us having a place to live was not allowed, and having vehicles was not allowed.

Yet in the above quote he says a place is allowed.

I'd rather read clear rules on what determines residency or not and decide this for myself. But AFAIK they don't exist or aren't publicly available, which leaves Revenue Canada in the position of being "very fickle and prone to irrational and incorrect assessment" & getting away with it.

I'd also rather read their rulings on cases & the reasonings behind them myself, including any that went to court, in particular those that are similar to mine. Where are these available online?

Additionally i'd rather not have to trust a single lawyer, who may be wrong in his opinions, and whose opinion may be the opposite or vastly different from other lawyers.

Moreover, i'd rather not hand my cash over to crooks, er, lawyers. It would rather defeat a purpose of a long trip to Asia, which is to save many thousands of dollars on the costs of shorter trips due to airfare & rent costs. If i stay in Asia i won't be subject to the expensive business class trips across the ocean & would give up my apartment in Canada, thereby also saving the cost of paying for simultaneous lodging in both Asia & Canada. Total savings around 20K per year. I'd rather not hand that amount over to lawyers before i even know if my 20K savings plan will work, since (A) i'd rather not pay that to a lawyer and (B) he might conclude that my savings plan won't be doable, in which case i'd be out 20K to the lawyer, and my savings plan will have backfired on me, having the opposite effect.

Gold is an investment as all investments was deemed sold for tax purposes.

I wonder if bank accounts like TFSA are considered "investments" and residential ties. I could put some cash into that before flying away from Canada, possibly never to return.

lenny, In all likely hood you will have no choice. If you are not making about $200k from international sources the legal costs to have the Tax people make an adjudication in writing before you go will cost more than you can save.

Just go and play and have fun as a tourist. If you do not like it you can always go home.

But what if i do like it and decide not to return? A chess grandmaster looks beyond the next move on the board.

 

[mrsCALoki]

I'm concerned i'll get badly burned by Revenue Canada declaring me a non-resident & charging me 25% in taxes,

Are you kidding? Do you know what a holding tax is? They hold until you file your taxes. You do not pay the holding rate. That is what this is all about? Never happens. Go talk to a lawyer if you do not believe me or email the question to tax man

Did the "Tax Man" decide this "ruling" upon any clear, definitive, objective and publicly written rules, or was it more like they were being "very fickle and prone to irrational and incorrect assessment", one which you could have taken to court and won?

If they believe you have maintained significant ties, you will not become a non-resident. You get a lawyer and you file for a ruling before you go. If you do not they can say you did naughty lying things, collect all back taxes, with interest, and penalties. YOU NEED TO SEE A LAWYER AND GET IT IN WRITING.

Yet in the above quote he says a place is allowed.

I'd rather read clear rules on what determines residency or not and decide this for myself. But AFAIK they don't exist or aren't publicly available, which leaves Revenue Canada in the position of being "very fickle and prone to irrational and incorrect assessment" & getting away with it.

I'd also rather read their rulings on cases & the reasoning behind them myself, including any that went to court, in particular those that are similar to mine. Where are these available online?

Hun, the internet is full of contradictory opinions. I doubt the Dominion of Canada cares what you "rather". The tax act can be found on-line. Unless you spend hundred of hours studying law it will probably not be a document the average person can understand. Go see a lawyer. If you cannot afford a lawyer here is no benefit to becoming a non-resident.

Additionally i'd rather not have to trust a single lawyer, who may be wrong in his opinions, and whose opinion may be the opposite or vastly different from other lawyers.

Moreover, i'd rather not hand my cash over to crooks, er, lawyers. It would rather defeat a purpose of a long trip to Asia, which is to save many thousands of dollars on the costs of shorter trips due to airfare & rent costs. If i stay in Asia i won't be subject to the expensive business class trips across the ocean & would give up my apartment in Canada, thereby also saving the cost of paying for simultaneous lodging in both Asia & Canada. Total savings around 20K per year. I'd rather not hand that amount over to lawyers before i even know if my 20K savings plan will work, since (A) i'd rather not pay that to a lawyer and (B) he might conclude that my savings plan won't be doable, in which case i'd be out 20K to the lawyer, and my savings plan will have backfired on me, having the opposite effect.

lenny you have to , apply for non-resident status. It is not something that happens to you. Not something the government does to you. Period. If you are really concerned just contact the Canadian Tax people by email and keep the response.

If you do not trust lawyers, what the heck makes you think Internet sources are more trust worthy?

At 7% tax I would suspect you would have little or no benefit from becoming a non-resident. The lawyer just advises you. Only a fool would start filing as a non-resident without having had a ruling before they leave. Just go! Go be a tourist. WTF is the issue? If yo are that concerned over $20k you are not in the income range where non-resident status becomes interesting. It costs a LOT more than that to safely become a non-resident

I wonder if bank accounts like TFSA are considered "investments" and residential ties. I could put some cash into that before flying away from Canada, possibly never to return.

Your kidding, right? No one can be that foolish. You must be just jerking around or you just lack the skills to understand what you are saying.

Sorry lenny, you are wasting my time. The internet is interesting and can be fun, but you need significant skills to be able to do real research on it. Go see a good tax lawyer. If you really are concerned and are too poor call the government tax toll-free number and ask if they can declare you non-resident without your consent. End of story end of conversation.

Bye bye