Quote:

---

Originally posted by meitsme

Thanks for detail.

see link below.

http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html

I am still confuse with your answer. I believe I'll be non resident once I'll move back to India with family after selling home. I will always be Canadian citizen but not living in Canada will make me Non Resident of Canada for tax purpose.

Tax for non-resident is different than resident of canada. I think it will be 25% flat on income from RRSP withdrawal. As per the link above, I think if I'll have $5K RRSP withdrawal income for full tax year (i.e. 2015) after becoming non resident, my tax will be $1250.

This is what something I want to confirm.

---

-------------------------------------------------

SOME Part of this is discussion and a few other parts are suggestions to you to take advantage of the tax situation like it is currently in existence.

RRSP is a LONG TERM Retirement Plan. The Government permits you to defer the tax when you save and WANT to TAX when you WITHDRAW. (Generally when you have no income at retirement.) If you collapse the plan to suit your needs, then you pay a price, which is the tax that they want you to pay as you no longer want to be using the RRSP's. Since you are leaving Canada and WANT TO CLOSE OUT THE PLAN, you have to pay the 25% tax upon withdrawal. They are not charging you, because you are leaving Canada, but because you are COLLAPSING IT.

Same as the above, IF You sell your property and get the capital gain or the loss, you can do it before you LEAVE Canada. There is no TAX on the Gains, even if you are leaving Canada. BUT If you sell it after you leave, then, any gains made after the date of departure becomes taxable. So, you leave yourself open to the tax system. SO, SELL Before you Leave. Of course you have to pay back the monies borrowed out of the RRSP's.

You did enjoy the tax break when you invested into the RRSP. Now you have to pay back all or most of it. See if you can minimize it. So, in the next year do not shelter it into RRSP.

Here is something more to think about if you consider to return back and then withdraw your RRSP's.
http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/nnrs-eng.html
Deemed Resident and Non Resident, you are still a Canadian, but might not get the tax benefit as your stay might be very short. So, do you gain by returning to Canada to withdraw? NO. So, think twice before you return to do that.

Now, sell your house, collapse your RRSP's and have all of the funds that you want to take back, ready to go, before departure. The first Two years in India are TAX FREE. Invest it into a Fixed Deposit that will return to you a minimum of 12% and enjoy it. (If you are a Non resident prior to investing it, then, you do not have to file a tax return to Canada.) Check with an accountant there in India to see if the interest earned there is TAX Free for the first two years, as you are an NRI, with RNOR status. So, you gain some here.

Now, upon your departure, obtain a clearance from the Canadian Government that you are a NON RESIDENT OF CANADA from such and such date, which is 31st of Decemeber 2014 and FREE yourself of filing a tax return from that day.

The TAX is the price you pay for your departure from Canada. But you have a NEW Citizenship now, which is CANADIAN.

You win some-- you loose some.

FH

Plan well, plan ahead and execute it and CYA.