Income tax is the way most of the countries collect revenue for the government. When you want to stop paying the income tax in any county, then you should leave the country. For instance, if you want to stop paying income taxes in Canada, then you should be exiled from the country. However, if you do not wish to move out of the country, then you need not worry. When you think that becoming tax exile or leaving the country is a very easy option, you need to know that this is not as easy as you think. When you want to be an income tax exile, the Canadian rules are strict. They have clauses that check various features. You need to meet these clauses before you want to become an income tax exile. The Canadian income tax department works by the NR 73 Form, which you need to be aware of, if you are planning to become an income tax exile.

When you want to be an income exile in this tax haven, then you would be questioned about your income tax eligibility in the new resident country. There are even many ways that tell you how to stay away from paying income tax in Canada. There are also books that tell you take the money earned in Canada and move to a different country and stay away from paying income tax in Canada. The country considers anybody who has no entity to pay the income tax, you would be considered a factual resident of Canada. In such cases, you would not be able to receive any services of Canadian country. This is very clear that the residents pay a tax and receive the services, only when he or she is bound to offer the country something.

When you are not in Canada and have moved out of the country and if you receive the CRA form, then you need to know that filling up the CRA form can actually trap you. So, what should you do if you get the CRA form? Simple, do not fill the form. You can get back to Canada and set things right. Of course, you can explain in detail and there are ways out. This is because if you are just migrating for a short time, the tax process can be tiresome. You would be charged a lot and much more hassles are associated.

When you are migrating out of this country, there are few things you need to do. Talk with a tax professional, and check if you need to pay the income tax in the given scenario. You can get the entire details of the income tax for the tax payers. Take some time and finish reading it. You can find all relevant information without fail. There are income tax professionals who can help you in this regard. Contact a reputed professional and see what you can do about the CRA form when you are not in the country. You can find loads of information online.

Canada is a country where there is no estate tax and this may sound great from the outside, but then what many don’t realize is that there is a deemed disposition tax in Canada which is very similar to estate tax. This is a tax that is applied by the Canada Revenue Agency after you die and is a liability that will have to be dealt with. This can be a problem for many, but then there are ways to get this sorted out by estate planning and to ensure that the assets reach the beneficiaries it is intended for without much hassles. We will be discussing about ways you can reduce the exposure of your assets to the deemed disposition tax and on how you can use planning to safeguard the interests of your assets.

Taxation Issues With Assets

The term deemed disposition tax is used because as per the government your investments are deemed to be sold when you die. Whenever assets are sold, there will probably be capital gains and the capital gains that one gets after the assets are sold after the death will be included in the final income tax return that will have to be filed in the year of the death. This final tax return will also include the income that is received from stocks, life insurance proceeds gained due to death, value of retirement accounts and real estate investments from the beginning of the death year till the date of death. The federal tax rate in Canada is up to 29% and this will mean that a substantial amount will have to be paid as tax even after death of a person. Provincial taxes will also apply. But there are ways to do some estate planning and defer the tax and it can be done by transferring the assets to a trust or to a surviving spouse using a will. But then if the spouse sells the property, the tax will again be applicable.

Options of Using Trusts

Using trust will often be the best option for estate planning and there a few types of trusts that you can opt for. They are

• Living Trust – This is a trust that is formed when the person is alive. This is a common trust that is formed by people who have a family business and is a popular choice.

• Testamentary Trust – These are personal trusts that are created on the day a person dies and the terms of the trust is usually determined by the will or a court order.