selling house in Canada and moving to Hong Kong - best way to transfer funds?

[darthwolf]

I'm considering taking a job in HK and planning to stay for maybe 10 years.
For taxation reasons I plan to declare non-resident which means a sale of all my assets including my house in Canada. Since the proceeds of the house will be over 10K, what is the best way to transfer a large sum of cash from Canada to Hong Kong? (Also from HK to Canada when/if I come back)

I have an account with Hang Seng in HK.

[HowardCoombs]

TT = telegraphic transfer.

Aside : selling your house is not a requirement for declaration of non-residency.
I'm a non-resident Canadian and own a home in Canada.

[darthwolf]

TT = telegraphic transfer.

Aside : selling your house is not a requirement for declaration of non-residency.
I'm a non-resident Canadian and own a home in Canada.

thanks for the aside. I'm a bit confused. Looking at the Gov't Canada website:

(should I fill out NR73 first before selling the house?)

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

Step 1: Determine if you have residential ties with Canada
The most important thing to consider when determining your residency status in Canada for income tax purposes is whether or not you maintain, or you establish, residential ties with Canada.

Significant residential ties to Canada include:

a home in Canada;
a spouse or common-law partner in Canada; and
dependants in Canada;
Secondary residential ties that may be relevant include:

personal property in Canada, such as a car or furniture;
social ties in Canada, such as memberships in Canadian recreational or religious organizations;
economic ties in Canada, such as Canadian bank accounts or credit cards;
a Canadian driver's licence;
a Canadian passport; and
health insurance with a Canadian province or territory.
The residential ties you establish or maintain in other countries may also be relevant.

[kvw21]

I too, thought that one would have to sell their house in order to declare non-residency! But Howard is right, it's not necessary if you take the right steps.

It seems like as long as you can prove that you don't have significant residential ties to Canada (e.g., by renting out your house under a long term lease) and you file your taxes correctly for the property, it should be fine?

I found these two links, they might be helpful?

http://www.cramagazine.com/issues/fa.../article03.htm
http://www.besthomesbc.com/taxes-for-non-residents.html

Maybe Howard could give us more advice?

[darthwolf]

Thanks for the info. Might still lean towards selling, I don't want to have to pay taxes on my principal res if I decide to lease then sell later. Beside, I'll prob need the $$ to be able to afford a place in HK.

[Adore]

Related question: Does anyone know how the Canadian government treats your RSP and TFSA accounts if you declare non-residency? I have a good amount of money in them and both are performing pretty well to the point where I'd like to keep contributing to them.

[Tripsplanner]

I am in the midst of sorting all these now as we are moving to HK (from Toronto) in 3 weeks' time. I'll try to best answer the questions from recent discussions we had with our tax consultant and financial planner:

1. Principal residence: If you decide to keep your property, you will be subject to "deemed disposition" clause for any assets exceeding $25K. Your property will then be considered held by non resident which will charged non resident tax upon sale. You can sell your house up to one year after departure, and get the principal residence exemption, as long as you obtain clearance certificates from CRA. Otherwise, CRA will request a 25% hold-back from the lawyer. Of course it would be easier if you sell the residence first PRIOR to moving. CRA definition of selling date is the closing date, not acceptance of offer.

2. As non resident, your TFSA and RSP accounts are "frozen" i.e. you CAN NOT contribute to them but they can still grow tax-free. Both accounts have to be marked as "non resident" and will be subject, when withdrawn, to non resident tax rate. Also to note, there's some rule about non-resident holding individual shares. I believe only mutual funds are allowed in those accounts.

3. Residential ties to Canada - usually CRA will question your residential tie if you keep your primary ties (e.g. immediate family members, primary home). Secondary ties, if only one or two (bank accounts, drivers license), will be subject to CRA's determination/ discretion.

To answer your final question, regarding transferring funds, we used HSBC Global Transfer (for Premier account). So the proceeds of our property will be deposited in HSBC Canada account and we will then use the Global Transfer facility to move it to HSBC HK account. If you don't have that, a telex transfer would be the next best thing.

Hope that helps!

[HowardCoombs]

Maybe Howard could give us more advice?

Tripsplanner answered things well - I cant improve upon his advice.

[darthwolf]

thanks all, this helps a lot.

[j-lam]

I used the forex places to do the fund transfer, rate was more decent than the banks. Set them up as a bill payment in Canada and then they TT the HKD into my HK account, takes about 4 days total. I used this place - Canadianforex but there are others around.