Are shares in a private Canadian company taxable Canadian property?
Sometimes, and the test turns on what the shares are worth rather than where the company was incorporated. Shares fall into the class where enough of their value comes from Canadian real property; shares in a company that simply trades here usually do not. That makes it a valuation question, answered by looking through the company to its assets, and it has to be answered before a sale rather than after, because the purchaser's obligation to hold back depends on the answer. Two further traps. The test looks back over a period rather than at the closing date alone, so a company that has since sold its building can still be caught, and holding structures have to be tested through each layer.
Is my Canadian rental condo taxable Canadian property if I live overseas?
Yes. Canadian real property is the core of the class, and it does not stop being taxable in Canada because the owner has become resident somewhere else. Two consequences follow for a landlord. While you hold it, the rent is Canadian-source and subject to its own withholding regime, which is separate from anything that happens on a sale. When you sell, the disposition is taxable here, the purchaser has to hold back against the price until a certificate says otherwise, and the depreciation you claimed against rental income in earlier years comes back into the computation. Neither consequence depends on where you file your main return.
Can a tax treaty stop Canada taxing my Canadian property sale?
Rarely for land and buildings. Treaties commonly leave gains on immovable property to the country where the property sits, precisely because that is the connection both states accept, so the usual result is that Canada taxes the gain and your country of residence gives credit for the Canadian tax. Where a treaty does real work is on the second-order questions: shares whose value is derived from property here, the ordering of the two countries' filings, and which country's measure of the gain applies in its own computation. So the practical question is not whether the treaty exempts the sale, but whether the two returns tell a consistent story about one disposition and whether the credit lands in a year where it can be used.
Why does taxable Canadian property matter when I leave Canada?
Because leaving triggers a deemed disposition of most of what you own, and this class is largely left out of it. The logic is that Canada does not need to tax property on the way out when it keeps the right to tax the eventual sale. The practical effect is that your departure year splits your assets into two lists: those valued and taxed as though sold on the day you left, and those that stay within Canada's reach and will be dealt with on a real sale later, with the purchaser's holdback and the certificate that goes with it. Getting an asset onto the wrong list either brings forward tax that was not due or leaves a gain unreported years afterwards.
My company sold its building years ago, so are the shares still caught?
Possibly, because the test does not look only at the day you sell. It reaches back over a period before the disposition, so shares can remain in the class for a time after the underlying property has gone. This is where sellers who have done their own reading get caught, having satisfied themselves that the company's assets today are all cash and receivables. It matters commercially as well as technically: if the shares are still in the class, the purchaser has to hold back against the price, and no explanation about last year's asset mix will persuade their solicitor to release the money without the certificate. Test the period, not the date, and document the conclusion before the share purchase agreement is signed.
Do I have to file a Canadian return after selling the property?
Yes, and it is the return that settles what you owe. Anything remitted on your behalf out of the sale price is a payment on account, not the tax, and it was calculated against the price rather than your profit. The return for the year of disposition is where the cost base, the selling costs and any depreciation recapture are brought together, and where the amount already remitted is set against the tax that computation produces. Any excess sits with the CRA until that return is filed. There is a filing deadline for the year of disposition like any other, so a seller who plans to deal with it eventually tends to find the eventually has cost them a late filing they did not need.
Can I set up a trust that works in two countries?
You can, but the two systems classify and tax trusts differently enough that a structure which is efficient in one is often a reporting problem in the other — a Canadian family trust with a US beneficiary, or a US revocable trust holding Canadian property, are the classic pairs. Canada's twenty-one-year deemed disposition, the US grantor rules and each country's reporting have to be read together, before drafting rather than after. See cross-border wills and trusts.
How does cross-border tax planning work?
It starts with facts rather than structures: which countries have a claim on you, what each one taxes, and where the two overlap. From there the decisions are about order and timing — which country taxes first, where relief is claimed, and whether a filing or a certificate has to be in place before money moves rather than after. Most of the value is in the sequencing, because relief claimed late is usually relief recovered slowly. See international tax planning.
