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  • Samer Tohme

Canada: Leaving The Country, Leaving Some Investments: Death Predicaments And Perils

It is challenging to relocate as there are too many things to look after and too many people involved. Moving across the border is much more complicated because you have to deal with complex tax consequences and a new language. Your belongings can be left behind in all the chaos and hurry. When possessions are left behind, complications can occur if the non-resident owner passes away and the process is transferred to the executor or relatives.

Of course, there will be logistical challenges to deal with. However, apart from the geographical problems that arise when an executor lives outside Canada, the greater economic institution enforcement aims to prevent income tax avoidance and financial fraud. It is highly problematic for a non-resident to create an estate bank account and offer trading guidance for capital assets in Canada.

Financial institutions of Canada have adopted lengthy and sometimes costly policies and standards that can be time-consuming and costly to fulfill, increasing the costs and time of property transfer. And if an Ontario conservatorship certificate has been obtained, these conditions must be met.

If the Canadian housing properties generate revenue or increase in valuation, income tax implications would be considered. Canada charges income tax on income earned in Canada, subject to certain exemptions and capital gains tax on most eligible Canadian property when it is currently or considered to be discarded, like in case of demise, with specific exclusions.

The "estate trustee" would be eligible to file a termination financial statement for the taxation year ending on the deceased's demise and any other tax returns required if the estate has value and financial gains after the victim's death. If tax filings and refunds are not made on schedule, interest, and penalties on back taxes may be imposed.

If the non-resident trustee or family members choose to control or liquidate Ontario properties, they might face further complications. A foreign property trustee has no power over the deceased person's properties in Ontario through common law because of a legal court mandate or authority granted to them because of the legislation of yet another jurisdiction. This ensures that they should seek a probate permit in Ontario in certain cases to validate their jurisdiction.

Although some laws have been introduced, they usually encourage but do not mandate a foreign contract. Therefore, it is up to the asset manager, including a financial institution, to determine if a foreign grant would suffice as proof of jurisdiction in such situations or if a local grant is needed. If the property is immobilized, a grant from Ontario would be expected unless there is an exemption. In most cases that involve a non-resident property trustee, financial firms will need an Ontario permit if the estate is an investment or bank account.

A Canadian grant would be required if the non-resident trustee is living in a commonwealth territory or agrees to determine what kind of court warrant is needed or the property holder is entitled to a judicial grant.

A non-resident property trustee who has died without any will in the territory of the non-Commonwealth cannot apply at all. In the first place, a non-resident estate trustee without a will who has not been awarded an international court grant is not qualified because of court rules, although in some cases. However, an Ontario court can make his appointment in some situations.

Suppose the person died with or without the will may not be allowed to post a bond by an estate representative who resides in a non-Commonwealth jurisdiction. In such instances, the judiciary in Ontario may exclude obligation for guarantee. Also, the law may decrease the value of a bond.

If security is required, it could be hard for a non-resident estate trustee to secure one. Also, it is impossible that the properties of Ontario will be used as bond security.

When cross-border property matters emerge, families and recipients need professional counsel to help them manage the unavoidable problems. It is better to prepare for challenges to prevent, but qualified experts may help you reach a good decision. It is not always easy.


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