Getting child taxes while living abroad

[Blueberrymuffins]

I took a 4 week vacation to Istanbul back in 2013. There I met a girl (now my wife) from a well off but very conservative family. I came back to Canada with plans to continue our relationship long distance and see where it leads.

Well a few weeks after my return I find out my girlfriend is pregnant. Her parents were not at all accepting of this and she ended up leaving her parents house to go on her own.

I owned a home and had a modest job at the time. I left my job, rented out my house, and flew over to Istanbul. It wasn't easy to let go of everything, but you do what you have to do.

I found a job there that paid me about $1500 / month. I was there almost three years before we were able to come back to Canada together.

I did not file my taxes for 2014-2016 because I thought I don't need to since I was living outside Canada. (I'm still not sure)

Also can I claim UCCB for my son for those three years we weren't in Canada?

I still paid property taxes for those years and have no problem claiming the income I made while living abroad. It wasn't that much, so I doubt I'll pay much in taxes if I had to. But the UCCB definitely will help if I'm entitled to it.

 

[scylla]

I took a 4 week vacation to Istanbul back in 2013. There I met a girl (now my wife) from a well off but very conservative family. I came back to Canada with plans to continue our relationship long distance and see where it leads.

Well a few weeks after my return I find out my girlfriend is pregnant. Her parents were not at all accepting of this and she ended up leaving her parents house to go on her own.

I owned a home and had a modest job at the time. I left my job, rented out my house, and flew over to Istanbul. It wasn't easy to let go of everything, but you do what you have to do.

I found a job there that paid me about $1500 / month. I was there almost three years before we were able to come back to Canada together.

I did not file my taxes for 2014-2016 because I thought I don't need to since I was living outside Canada. (I'm still not sure)

Also can I claim UCCB for my son for those three years we weren't in Canada?

I still paid property taxes for those years and have no problem claiming the income I made while living abroad. It wasn't that much, so I doubt I'll pay much in taxes if I had to. But the UCCB definitely will help if I'm entitled to it.

The answer is no for the UCCB claim. You won't qualify for UCCB until you and your son relocate to Canada and start living here.

And you're right about taxes. No need to file since you are a non-resident. You're good there.

 

[Rob_TO]

I did not file my taxes for 2014-2016 because I thought I don't need to since I was living outside Canada. (I'm still not sure)

Also can I claim UCCB for my son for those three years we weren't in Canada?

I still paid property taxes for those years and have no problem claiming the income I made while living abroad. It wasn't that much, so I doubt I'll pay much in taxes if I had to. But the UCCB definitely will help if I'm entitled to it.

Your physical residency is just one of many factors that determine if you were required to file a Canadian tax return. To be declared a non-resident for tax purposes you would have needed to sever your ties to Canada.

If during those years you owned property (as you paid property tax), had financial accounts (credit cards, bank accounts, etc), registered savings (RRSP, etc), and always intended to move back to Canada, then you very well could be considered a deemed/factual resident for tax purposes even though you weren't living here. This would indeed require you to pay taxes on all worldwide income earned during that time. You were supposed to have told CRA back when you left, to get a decision on your non-residency tax status.
Read here: https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html

If you do file back taxes in a batch now going back to 2014, and you indeed owed money to Canada on your foreign income, you can expect some fines/late payment penalties, and most likely will be flagged for all future tax filings. Best to talk to an accountant how to proceed.

 

[torontosm]

I left my job, rented out my house, and flew over to Istanbul. .

Based on this, you have to file your tax return for the time you were away.

And no, you do not qualify for UCCB as you were not in the country and neither was your child.

 

[Blueberrymuffins]

Your physical residency is just one of many factors that determine if you were required to file a Canadian tax return. To be declared a non-resident for tax purposes you would have needed to sever your ties to Canada.

If during those years you owned property (as you paid property tax), had financial accounts (credit cards, bank accounts, etc), registered savings (RRSP, etc), and always intended to move back to Canada, then you very well could be considered a deemed/factual resident for tax purposes even though you weren't living here. This would indeed require you to pay taxes on all worldwide income earned during that time. You were supposed to have told CRA back when you left, to get a decision on your non-residency tax status.
Read here: https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html

If you do file back taxes in a batch now going back to 2014, and you indeed owed money to Canada on your foreign income, you can expect some fines/late payment penalties, and most likely will be flagged for all future tax filings. Best to talk to an accountant how to proceed.

My income at the time was equivalent to about 18k and in that case I would be receiving a refund.


"What about the Universal Child Care Benefit?
If you are eligible to receive the Universal Child Care Benefit
(UCCB), you will continue to receive the UCCB during your
absence from Canada"

"For you to be considered a non-resident, there must be some
permanence to your stay abroad"

I left because I had to. And never intended on staying. There was no permanence or intention of it. As soon as my wife's application was processed I returned.

What happens if I never notified them that I left? I didn't know I was supposed to.

 

[canuck78]

My income at the time was equivalent to about 18k and in that case I would be receiving a refund.


"What about the Universal Child Care Benefit?
If you are eligible to receive the Universal Child Care Benefit
(UCCB), you will continue to receive the UCCB during your
absence from Canada"

"For you to be considered a non-resident, there must be some
permanence to your stay abroad"

I left because I had to. And never intended on staying. There was no permanence or intention of it. As soon as my wife's application was processed I returned.

What happens if I never notified them that I left? I didn't know I was supposed to.

Child benefit is intended to cover the high cost of having children in Canada. If CRA finds out you weren't living in Canada with your child they will make you pay back the benefit with a penalty.

 

[scylla]

My income at the time was equivalent to about 18k and in that case I would be receiving a refund.


"What about the Universal Child Care Benefit?
If you are eligible to receive the Universal Child Care Benefit
(UCCB), you will continue to receive the UCCB during your
absence from Canada"

"For you to be considered a non-resident, there must be some
permanence to your stay abroad"

I left because I had to. And never intended on staying. There was no permanence or intention of it. As soon as my wife's application was processed I returned.

What happens if I never notified them that I left? I didn't know I was supposed to.

You've been gone since 2013. There is most obviously permanence to your stay aboard. This wasn't simply a short vacation. You have lived outside of Canada for a number of years without filing taxes. Again, you don't qualify for the benefit.

If you lie about your absence and claim the benefit, assume CRA will find out sooner or later, force you to repay the benefits you weren't eligible to receive - along with a fine. You should then expect it will be more difficult to qualify for the benefits you are in fact eligible for since you have previously defrauded the system.

 

[Rob_TO]

My income at the time was equivalent to about 18k and in that case I would be receiving a refund.

You only receive a refund if you paid too much taxes during the year. If CRA decides all those years you should have been a deemed/factual resident for tax purposes due to your ties to Canada, then you would need to file back-tax returns in bulk showing your worldwide income and the rental income you received for your home in Canada. What taxes you'd pay on worldwide income, depends on the details of tax treaty between Canada and Turkey (should mean any tax you paid already in Turkey would be discounted from Canadian portion of tax).

"What about the Universal Child Care Benefit?
If you are eligible to receive the Universal Child Care Benefit
(UCCB), you will continue to receive the UCCB during your
absence from Canada"

"For you to be considered a non-resident, there must be some
permanence to your stay abroad"

I left because I had to. And never intended on staying. There was no permanence or intention of it. As soon as my wife's application was processed I returned.

What happens if I never notified them that I left? I didn't know I was supposed to.

Getting child tax benefits requires you to be a resident of Canada. For some benefits, being a deemed/factual resident for tax purposes is sufficient even though you live outside Canada, while for other benefits physical residency presence in Canada is required. At a minimum, tax residency is mandatory (so would require all your Canadian taxes to be filed). Anyone who was not a resident for tax purposes would be excluded from all benefits.
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/factual-residents-temporarily-outside-canada.html

The UCCB is a dead program now, so really am not sure how it works to try and claim it so late. As I said you would need to do all your back-taxes going back to 2014, and even after this CRA may declare you ineligible for UCCB since you were outside Canada for so long. If you failed to declare your rental income in Canada and your wolrdwide income, as mentioned you could be faced with lots of fines and penalties, not to mention being flagged and audited every year going forward.

Your situation is complex, you should really talk to a personal tax accountant experienced with Canadians living outside Canada.

 

[Blueberrymuffins]

You've been gone since 2013. There is most obviously permanence to your stay aboard. This wasn't simply a short vacation. You have lived outside of Canada for a number of years without filing taxes. Again, you don't qualify for the benefit.

If you lie about your absence and claim the benefit, assume CRA will find out sooner or later, force you to repay the benefits you weren't eligible to receive - along with a fine. You should then expect it will be more difficult to qualify for the benefits you are in fact eligible for since you have previously defrauded the system.

I'm not interested in claiming something that doesn't belong to me, or not paying something I owe.

I'm just in a very complicated situation and want to ensure that I take the right steps and avoid this being a mess.

I did the right thing by supporting my wife and being there for her when she was pregnant. I just had no idea I would of still been considered a resident. Had that been the case, it would of been much easier to deal with at the time.

 

[Blueberrymuffins]

You only receive a refund if you paid too much taxes during the year. If CRA decides all those years you should have been a deemed/factual resident for tax purposes due to your ties to Canada, then you would need to file back-tax returns in bulk showing your worldwide income and the rental income you received for your home in Canada. What taxes you'd pay on worldwide income, depends on the details of tax treaty between Canada and Turkey (should mean any tax you paid already in Turkey would be discounted from Canadian portion of tax).



Getting child tax benefits requires you to be a resident of Canada. For some benefits, being a deemed/factual resident for tax purposes is sufficient even though you live outside Canada, while for other benefits physical residency presence in Canada is required. At a minimum, tax residency is mandatory (so would require all your Canadian taxes to be filed). Anyone who was not a resident for tax purposes would be excluded from all benefits.
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/factual-residents-temporarily-outside-canada.html

The UCCB is a dead program now, so really am not sure how it works to try and claim it so late. As I said you would need to do all your back-taxes going back to 2014, and even after this CRA may declare you ineligible for UCCB since you were outside Canada for so long. If you failed to declare your rental income in Canada and your wolrdwide income, as mentioned you could be faced with lots of fines and penalties, not to mention being flagged and audited every year going forward.

Your situation is complex, you should really talk to a personal tax accountant experienced with Canadians living outside Canada.

Thanks. I appreciate all the info.

And I did speak to an accountant, but it didn't help much.

But you do make a very good point. I should find someone who has specific experience with Canadians living abroad.

 

[torontosm]

I'm not interested in claiming something that doesn't belong to me, or not paying something I owe.

I'm just in a very complicated situation and want to ensure that I take the right steps and avoid this being a mess.

Your situation is far from complicated...it's actually quite simple. As neither you nor your child were living in Canada, you are not eligible for benefits. That's it.

 

[Rob_TO]

. I just had no idea I would of still been considered a resident. Had that been the case, it would of been much easier to deal with at the time.

I was not saying for sure you would be considered a resident during your absence. I'm saying that depending on all of your ties to Canada (as per the link I posted above), CRA may determine you were a deemed resident and would have expected you to file taxes all those years. It's not a simple yes or no question, as all your ties need to be assessed and a final decision made. When you leave Canada, you're supposed to get a determination from CRA at that time if they will accept your claim of non-resident for tax purposes so you don't find yourself in this mess later on.

To not open this whole can or worms, you may just want to proceed under the assumption you were a non-resident so didn't need to file taxes on your world foreign income.

The real complication I see is your rental income from Canadian home. This would of course require taxes to be paid to Canada, so not sure how you were handling this.

 

[torontosm]

The real complication I see is your rental income from Canadian home. This would of course require taxes to be paid to Canada, so not sure how you were handling this.

I agree with this. As a non-resident with a property that is rented out in Canada, you had an obligation to remit 25% of the rent on a monthly basis to the CRA, and then file your taxes at year end to see if you were eligible to receive anything back. Having not done that, I would encourage you to come clean ASAP and let the CRA know. This could quickly become your main issue rather than your child tax benefits.