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Unformatted text preview: Chapter 2: Liability for Tax Solution 1 [Reference: Glow v. The Queen, 92 DTC 6467 (F.C.T.D.)] (A) Full-time resident: taxed in Canada on worldwide income for the whole year; Criterion: continuing state of relationship with Canada; i.e., ties; Evidence: born, raised and educated in Canada, agreed to short-term contract abroad, contract provided for living expenses, indicating the temporary nature of the stay abroad, fees under the contract were paid to the clients Canadian corporation, he continued as a shareholder, director and officer of the Canadian corporation, he maintained an interest in the activities of the Canadian corporation, he maintained a Canadian bank account, he owned a rental property in Canada, he arranged a rental on a month-to-month basis to allow him to resume his habitation of the residence on short notice, he stored his major furnishings and winter clothing in Canada, indicating an intention to return, he retained credit cards issued in Canada and his RRSP accounts, he maintained his health coverage in Canada, he did not extend his visa in Nigeria, indicating an intention to return, he did not pay income tax in Nigeria, indicating a lack of permanence in his stay there, his girlfriend returned to Canada, spending only a fall term and a summer in Nigeria with him, indicating a lack of permanence in his stay, he returned to Canada, leaving nothing in Nigeria. (B) Deemed full-time resident of Canada: taxed in Canada on worldwide income for the whole year; Criterion: sojourned in Canada for an aggregate of 183 days or more in the year [par. 250(1)( a )]; Evidence: when he was in Canada until July 1976, he was not sojourning, despite being in Canada more than 183 days in that year, therefore, deemed residence is not a possibility in this particular case for 1976. (C) Part-time resident in 1976: taxed in Canada on worldwide income for the part of the year while resident; Criterion: clean break, i.e., severed ties in July 1976; Evidence: the Canadian bank account was only to avoid foreign exchange difficulties and to maintain his rental property, no withholding of income tax on his fees, he intended to establish an international consulting business abroad and to that end attempted to promote such a business in Nigeria, he intended to sell his rental property in Canada when market conditions were right and to this end he arranged a rental on a month-to-month basis to facilitate a sale, he moved his personal effects to Nigeria, he sold his car, he cancelled his auto insurance and a gasoline company credit card, he was accompanied to Nigeria by his girlfriend who stayed with him when not in school, he rented an apartment in Nigeria because more permanent accommodation was not available, he obtained a Nigerian drivers licence, he maintained two bank accounts and cars in Nigeria, he joined clubs in Nigeria, he had an office in Nigeria,...
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This note was uploaded on 09/30/2008 for the course ACCT 360 taught by Professor Jones during the Summer '08 term at Windsor.
- Summer '08