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Moving Back to Canada

Resources for Expatriate Canadians returning to Canada after living in the U.S. or further abroad


Taxes, Accounting, and Banking


This section addresses some of the key concerns Canadians face when returning to Canada. They are serious topics and the choices that you make can have significant financial repercussions for the short and long term. As a result, research and careful consideration is highly recommended in the planning of your finances, taxes, and banking arrangements. Key concerns:

  1. Taxes - Do I pay taxes on my financial assets and personal belongings when I return?
  2. Accounting - What accounting do I need to do? Do I need a professional accountant to help me with my taxes before or after I return to Canada?
  3. Banking - Can I open a bank account in Canada ahead of my move back? Should I? Can I move funds into it before I move without risk of paying taxes in Canada?

Part 1: Taxes


Understanding taxes when you move back to Canada

Let's clear up the most pressing and concerning questions Canadians have when returning to Canada:

"Do I pay taxes in Canada on my money (savings, investments, etc.) that I bring back with me when I move back to Canada?"

The short answer: No.

The longer answer: If you meet the following conditions you may transfer to Canada as much money as you wish before or after you move and these funds will not be subject to taxes in Canada:

  1. The money you are bringing into Canada has been gained from legal sources. You are not bringing in "laundered" or illegally obtained money. If this is the case you will be subject to far worse legal challenges than paying tax on the money you bring into Canada.
  2. You have lived outside of Canada the required length of time to be considered non-resident in the eyes of the Canada Revenue Agency (CRA). This is typically 2 or more years. Shorter periods of time living away from Canada can be fine but the conditions of your life abroad must be clearly non-resident (see next point).
  3. You do not have significant residential ties to Canada. This means you do not have a mix of the following:

    • A "home" in Canada you own where your spouse and/or dependents are currently living full-time and you are clearly in full financial support of them.
    • You are not actively enrolled in a province's public health insurance. Specifically, you have never used provincial health insurance while you have lived abroad including when on vacation in Canada.
    • You do not have an active Canadian driver's license that you renewed while on a visit to Canada and the address of which is a family member's home in Canada.
    • You do not have a licensed and insured vehicle in your name in Canada.
    • You do not have a Canadian bank account with a local (Canadian) address as the official address. Note: You can keep a Canadian bank account and it can be really useful while living in the U.S. or overseas to have one! But change your address on this account to your new non-Canadian address. Do not change it to a family member's address in Canada, even though it may seem convenient to do so.
    • You do not have a Canadian employer who pays you from Canada.
    • You do not earn self-employment or other forms of work-related income from sources in Canada. For example, you do not visit Canada and then do workshops, training, short contracts, consultations, or other similar forms of work in Canada.
    • You have not spent more than 6 months cumulatively in Canada in any one 12 month period while living abroad
    There are other residential ties, but these are the big ones that clearly define if you are a resident of Canada or not.

    Notes: As noted above, having a Canadian bank account or having financial investments "parked" in Canada (in a dormant RRSP or TFSA, for example) does not make you a tax resident of Canada. You need to be concerned with your physical body "living" in Canada in some form and a resulting "residential footprint".

    Similarly, if you own a condo or house in Canada and are renting it out this is an investment and is not your residence. And a vacation property in Canada (condo, house, cottage) is just fine to own as long as you do not have a mix of the above noted residential ties to Canada.

In summary, if you meet the general criteria noted above you will not be taxed by the Canadian government on funds you bring into Canada or send to Canada before or after you move back.

Bringing more than $10,000 with you over a land border or through an airport into Canada


One typical concern returning Canadians have is the "CDN $10,000" limit that is clearly noted on all airline information and Canadian government web sites.

Please note that this CDN $10,000 limit is for having to report what you are physically bringing into Canada through an airport or land border crossing (not any amounts you transfer electronically, which has no limit and no reporting requirement at the border). Anything over CDN $10,000 in physical cash, gold coins/bullion, raw diamonds, or other liquid physical forms of financial currency or assets (such as a physical bank draft payable to yourself that you bring with you) must be reported at the time you enter Canada.

You do not need to pay tax on amounts over CDN $10,000 but you must report how much you are bringing if you are over that limit. This rule is for currency controls and money laundering reasons, not specifically for tax reasons.

One person brought CDN $350,000 in gold bars with him and his family on the plane to Canada from Dubai. While this is completely acceptable legally and is not taxed in Canada, I do not recommend bringing these amounts with you for security reasons. There are money, bullion, and jewellery shipping companies which specialize in securely shipping such items. Please use one of these services if you are bringing large amounts of physical liquid assets. The risk of theft is too high!

"But nobody will know. We will keep it a secret and hide it in our clothes!"

No, just no. I recommend you do not bring very high value amounts of cash, gold, jewellery, or other liquid or easily liquidated items with you. Ship them securely.

Real estate owned abroad


One very typical concern Canadians in the U.S., UK, Australia, Hong Kong, and UAE in particular have is the selling of their overseas property when they return. The cleanest and easiest situation is to have your overseas real estate sold before you return and the funds from the sale sitting in your foreign bank account.

Simple.

Then you transfer this money to Canada when you come back and it is clearly yours at the time of your return. No later tax issues with the government of the country you are in now or with the Canadian government after you return.

But what if you haven't sold it yet? Or you want to keep it for awhile before selling, due to market conditions at the time, or as an investment to sell much later?

If you are in the process of selling a property abroad and expect it to sell in the near future (within 3 months and within the same tax year) you are fine from the perspective of taxes in Canada. Your property is already listed for sale at a price that is clearly publicly available. There is no taxable "gain" if it sells at or around the asking price.

However, what if you plan to list the property for sale in the more distant future?

The key in this case is to have a solid third-party valuation done of your overseas real estate and on all your overseas investments at the time your return. This becomes your benchmark valuation for when you start paying taxes in Canada. Any capital gains, rental income, interest income, dividends, or profits you earn starting from the day you return to Canada onwards become taxable in Canada.

To be clear and stated again: You pay tax in Canada only on all forms of income earned from the day you return to Canada onwards in time. Having a clear valuation of your overseas assets done very close to, or on the day you return to Canada, will be very useful later as a benchmark of the value of your assets at that time from which to calculate and prove the gains you earned after moving back.

Taxes in the country you are leaving


Important: The guidance above is for the Canadian side of the tax equation - taxes that you do or don't pay in Canada to the Canadian government in relation to your move back to Canada.

However, you must plan carefully for any tax implications in the country you are leaving! In particular, the IRS in the United States can levy huge penalties if you do not plan your move carefully and file all the appropriate paperwork before you leave and when you do your first dual-filing tax return once you are back in Canada. Other countries have their own regulations, laws, and punitive penalties that you must prepare for!

Moving back from the U.S.? See the USA Resources section of this site for more information on taxes.

Final word of caution: Please be very proactive about researching and planning your exit taxes from the country you are in. Occasionally I get an email from someone who tells me I am wrong and that they paid huge tax penalties. When I gently check in with them I immediately hear that they didn't do any tax planning and no required paperwork when exiting the country they were leaving (sigh). The world is complicated, folks! Plan for it proactively to minimize any questions, hassles, and tax penalties later!

Vehicles


Bringing your vehicle into Canada with you from the U.S. will usually result in taxes in the form of GST/HST and possibly import duties. Vehicle imports are detailed more fully on the "Moving Back from the USA" resource page of this site and I recommend you visit the official riv.ca web site for full details on importing your American car into Canada when you return. Note: You may not bring in normal vehicles from countries other than the U.S. There are very special exceptions (ancient collector vehicles, for example), but normal current age vehicles may only be imported from the USA.

Tax Treaties


Canada has tax treaties with many countries. If you pay taxes in another country that has a tax treaty with Canada you do not pay taxes in Canada on that same income or you get a tax credit in Canada on the taxes you pay abroad. You will never be double-taxed when there is solid tax treaty in effect. If there is a big difference between the lower taxes you pay abroad and the higher tax levels you would have to pay in Canada have care in maintaining your Canadian non-resident status until you are ready to resume residence in Canada so as to minimize your tax levels.

List of countries Canada has tax treaties with: Tax Treaties in Effect .

Asking the Canada Revenue Agency (CRA) to declare you "non-resident"


Before they go overseas, or during their time living abroad, many Canadians wonder if they should seek a CRA declaration stating they are non-resident (Form NR73). I do not normally recommend doing so. Why not? Well, for one thing, you are now opening a "case file" in their system where a file does not need to be opened. If you cut all reasonable residential ties to Canada and have proof of living and working outside of Canada you are non-resident. Why bring CRA attention to your tax situation unnecessarily? While I am not claiming anything really bad will happen by doing so, does it make intuitive sense that no "case file" is better than having one? I hope so.

Here is an analogy to help make clear why CRA "approval" of your non-resident status is perhaps not desirable:

Why you may not want to advise the CRA you are moving abroad

The CRA is a hungry lion. A real lion is biologically designed to hunt and consume food when it is hungry. Similarly, the CRA is designed to capture taxes. And as all governments in the world are hungry for tax revenues, the CRA is hungry for any tax revenue it can find.

You are a gazelle.

When you ask the CRA to not tax you, you are in effect a gazelle going up to a hungry lion, sitting down in front of it, and asking it: "Please Mrs. Lion (female lions do all the hard work), I would like you to not eat me. In fact, I would like you to declare to the whole savanna that you agree not to eat me."

Well, the lion is not designed to "not eat you". It is not thinking about "not eating you". It is hungry and thinking about eating you!

Similarly, asking the CRA to do something that is literally against its mission, purpose, and DNA may get you what you want, but it will not be happy doing so.

In summary, can you imagine how a hungry female lion feels having to "not eat you" and watch you walking away? At the very least, it might feel mildly annoyed. At worst, seriously annoyed. If it ever sees you on the savanna again, it will remember you as the one who got away and irritated it with a silly request to not eat you, when you really would have tasted rather yummy and filled the hole in its stomach. Is that what a gazelle wants a lion to feel about it?

Is that what you want the CRA to feel about you?

A quote from a Canadian abroad who chose to ask the CRA to declare him non-resident:

"I should not have asked the CRA to declare me non-resident. They hounded me for two years afterwards, despite me proving clearly that I was living in ______. I finally got through to them and they grudgingly admitted I was clearly non-resident."

In summary: When you leave Canada do so with a clear ending of your residential ties to Canada. See earlier on this page for a list of the key ties to cut. The small percentage of Canadians who run into problems with the CRA? They did not cut ties either because did not know they had to or by willfully trying to "have their cake and eat it too" - they tried to have Canadian benefits while not paying taxes in Canada. No. Just no. Stay in full integrity. If you leave Canada to live abroad and not pay taxes here then cut all key Canadian residential ties.

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Part 2: Accounting


For most Canadians returning from the U.S. who have significant assets it is really important to research tax rules and regulations carefully. If you don't have the inclination to do this, engaging my support and/or the support of a professional cross-border tax accountant in Canada makes sense and save you a lot of potential time, hassle, stress, and money. Knowing the tax rules and regulations is particularly important for the first year after you return when almost all returning Canadians have to start filing tax returns in both countries (called "dual filing").

If you are returning from Hong Kong, the UK, the UAE, Australia, etc., engaging the support of a international tax accountant is usually not needed unless you have very complicated personal investments, trusts, business assets, etc.

Returning from the U.S.? Here are some areas that can cause you complications and result in costly tax payments and penalties. Getting proactive professional support really makes sense in these cases!:

Tax Accountants - Recommendations?


I have met and spoken with several tax accountants and tax lawyers across Canada who I can recommend and for whom I have received feedback from happy clients that we have in common. Please note that I receive no commission or other benefit from these recommendations so you can trust that these are great professionals to work with.

The following link to the "Professionals" resource page on this web site:


Top of page | Your thoughts? | Professional Help


Part 3: Banking


opening a bank account in Canada

It used to be the case that simply having a bank account and doing banking in Canada could trigger you being considered resident here, with resulting tax implications. This is no longer normally the case. Financial assets of all kinds move around the world daily in millions of different transactions. Simply having a bank account or other financial investments in Canada (such as a "parked" RRSP) will not impact your non-resident tax status.

What about a credit card? I do not recommend keeping an active Canadian credit card while living abroad. This is because a credit card, if used during your vacations here and when you are overseas, starts to look like you have more than an "arms-length" tie to Canada. In other words, using a Canadian credit card starts to make you look like a resident of Canada. Not a major tie by itself but in combination with other ties it starts to paint a picture you may not want painted.

Can you open a bank account from abroad?

If you do not have a bank account in Canada and wish to open one while you are physically abroad, you can now do so more easily. The Royal Bank of Canada (RBC), HSBC, and CIBC for example, now allow you to open a "deposit only" bank account before you come to Canada. I have also heard that TD Bank now allows Canadians living in the U.S. to open an account remotely.

However, some of my clients are reporting that other Canadian banks and trust companies do not allow you to set up an account unless you are physically present in Canada. One client, for example, got nowhere with ScotiaBank, who told her that they required physical presence at a branch in Canada to set up an account.

Your experience with Canadian banks while you are non-resident can vary until you are physically present in Canada which is when it is easiest to open an account or confirm one. The lesson: Be persistent when contacting a Canadian bank from abroad as some representatives may not understand that you may be able to access "newcomer" packages or be able to open a new account because you are a Canadian citizen.

A useful and illustrative story from a client in 2021:

"You may recall we were having issues setting up an account in Canada with the HSBC and Royal Bank. HSBC [Oman] wanted exorbitant fees and commissions and the Royal Bank, well, they just did not respond to any of our emails!

Good news, my niece contracted her local branch of the CIBC Bank and I was fortunate to set up a “deposit only” account with them in three business days. Besides the standard online applications and required two pieces of photo ID, all I needed was access to a Canadian cell phone to receive activation codes, which my niece was kind enough to allow her number to be used. The process was both seamless and gratifying, nice to do business with a bank that truly wants my business.

Thank you, Bill M., for sharing your experience!


RBC's process for opening new bank accounts from outside Canada

Here are the steps:

  1. Visit the RBC web site and follow the "open a new bank account" steps.
  2. At the appropriate step, choose "not a resident".
  3. Fill in your personal details.
  4. "Within 5 days you will receive an application by email" (told to me by RBC).
  5. Submit the application. Be sure to use your Canadian citizenship ID - not a foreign driver's license or foreign resident card.
  6. Within 90 days of submitting your application, arrive in Canada, visit the branch, and using the exact same ID you sent in online, sign paperwork with them. (Note: Don't open a bank account earlier than 90 days before you are going to arrive in Canada.)
Note: The account will be "deposit only" until you arrive and sign the paperwork, at which point you will have full banking services available to you. This is just fine for most returning Canadians because all they want to do is send their savings home before they move. And there is no limit on the size of the amount of funds you can wire transfer to this account, to be clear.

HSBC: Opening new bank accounts from outside Canada

HSBC has long been known as a true "international" bank. They have for years promoted themselves through airports in Canada, for example, as a borderless bank that can you help you do things. From my experience this is true. I have used their services, a colleague arranged a mortgage from Dubai for the purchase of a condo in Victoria, BC, and the following experience shared with me shows that opening a Canadian bank account from abroad is entirely possible with HSBC:

I am planning on moving back to Canada from HK and I was able to go to the HSBC international center at their main branch and they assisted my setting up a Canadian bank account. It took about a month from start to finish but it is doable.

Thank you, Catherine H. for sharing your experience!

Opening a bank account in Canada while visiting, with a foreign address

Yes! As long as you have appropriate forms of personal identification you can open a bank account in Canada while visiting Canada, using a foreign address for the account. In fact, this is the easiest and best way to open an "unrestricted" bank account that you can use while in Canada or while you are abroad! An experience shared with me:

I was able to open a joint account with my husband (US citizen) using our current US address. Granted, we did have to open the account in person, but we just arranged this when we were on holiday in Ottawa. There was absolutely no hesitation at all from TD Canada Trust and they knew we didn't have a Canadian address upfront. My impression was they didn't care, as long as we had the appropriate identification. I have even changed my US address, and again, no issues, I just had to call in the new address.

"Can we keep our U.S./overseas bank accounts when we move back to Canada?"

This is a common question. The answer is "yes".

There is no legal reason from Canada's perspective as to why you can't keep a U.S. or other country bank account. Most Canadians returning from the U.S. keep at least one bank account there.

Other countries may not allow you to keep your bank account when you leave their country and become resident in Canada. Be sure to check on their regulations regarding bank accounts for the country you are leaving.



Your idea? Your thoughts? Your experiences?

Your ideas, considerations, and experiences?


Please share your ideas, considerations, and experiences relating to taxes, accounting, and banking. I will post them here as help for others. Along with a credit to you will be a big "Thank you!" on behalf of the many people you will be helping!

Thank you!

Paul Kurucz

Canada

Latest update to this page: July 2021.





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Paul Kurucz

Would you like help with your move?


Paul Kurucz

Would you like help with your move?


Paul Kurucz

I offer professional support to help you prepare for a smooth and easy return to Canada so you can feel confident and organized!

Your questions about when to move back, taxes, investments and finances, bringing back your household belongings, health care, and more will be answered promptly and professionally, with resources to back up what you need. My 18 years of supporting over 1,200 clients gives me a depth of expertise across all aspects of planning and returning to Canada.

Paul Kurucz - Canada


A happy client:

Hi Paul,

Just to update you - we landed and sailed through customs! So thank you so much for all of your advice...It was a thoroughly pleasant experience.

This is to say thank you for everything. Your advisory has been so incredibly helpful and saved us considerable time and removed room for error.

With best wishes,

Caroline

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