Final answer:
Residency in Canada for personal income tax purposes is determined by factors such as an individual's residential ties to Canada, including home ownership, family ties, presence during the tax year, and intentions or actions showing commitment to Canada.
Step-by-step explanation:
When assessing residency in Canada for personal income tax purposes, various factors are taken into consideration. These factors are meant to ascertain the residential ties an individual has to Canada, which is crucial for determining tax obligations. The major considerations include:
- The permanence and purpose of the individual's stay inside or outside Canada.
- Residential ties in Canada, such as owning a home, having a spouse or dependents in Canada, and holding a Canadian driver's license or healthcare coverage.
- Secondary ties may include having personal property in Canada, such as a vehicle or furniture, or social ties like memberships in Canadian organizations.
- Regular and substantial presence in the country over the tax year, typically quantified as 183 days or more.
- Intentions and actions that show a residential tie to Canada.
The Canada Revenue Agency (CRA) uses these factors to determine residency status, and subsequently, an individual's tax liability. The exact weight and relevance of each factor may vary based on the individual's specific situation.