Canada taxes and NR73 question

[harveyxoxo 0]

Just wondering if anyone has been in a similar situation or has any advice/insights to offer. 

I left Canada in July 2016, but had plans to return in 2018 so continued to file my taxes as a resident and kept my house vacant. 

I was offered a very good paying full time job in the US once my contract expired, and I've decided to accept and live in the US. I do have a green card. 

I've since sold my Canadian residence ( the closing date is tomorrow) and since I was filing taxes as a resident i sold the house as a resident of Canada. 

I have a sizeable amount of money in a LIRF that I would like to get access to to re-invest in the US. The stipulation from Manulife is that you need to be living room outside of Canada for 2 years, and need to file NR73 with the CRA to prove you are a non-resident for tax purposes. (They did not stipulate you need to be a non-resident for tax purposes for 2 years before applying). 

My question is, if I do submit that paperwork to get the money from my LIRF, are the CRA likely to come after me for departure tax or capital gains tax on the sale of my house? 

Anyone with similar experiences or situations / advice to share would be appreciated! 

[AC&BS 23]

Residency in Canada is determined by the facts and circumstances of your ties to Canada so there is no bright line test. You can probably find the factors on line and the NR73 form questions are built off of the factors. One of the factors is how long you have been out of the country, two years is seen as a positive factor that you have broken residency. One of the other factors is whether you have a home that is available to return to. I would consider the fact that you had a vacant home and the fact that you had a contract position both big indicators that you had not broken residential ties to Canada and were therefore subject to tax in Canada. The transition to a full time job and the sale of the house would to me indicate a breaking of residential ties to Canada with the sale of the house to be the final act as a resident of Canada. 

I don't know what a LIRF is but it sounds like it is a tax deferred plan. Other tax deferred plans like RRSPs for example can be left to grow in Canada tax deferred and the growth is not taxed in the US, (if you file the form to claim treaty protection), you might want to consider leaving it there.

From the insurance company's point of view,  they are responsible for getting the withholding taxes correct. If they get it wrong, it comes out of their pocket as they won't be able to get the taxes back from you. So they are protecting themselves. 

Whether you file the NR73 or not you do owe departure tax on gains on assets you hold at the time you leave Canada. The sale of you house should not be subject to tax if it was your principle residence. 

All of the above is just my opinion based on the facts as presented.