CANADA Law and Practice Contributed by: Ian M Hull, Suzana Popovic-Montag and Nick Esterbauer, Hull & Hull LLP
Domicile is relevant to inheritance claims, as it deter- mines which law governs succession over movable property. For immovables, succession is governed by the law of the place where the immovable is situated. Domicile is also salient to whether a marriage revokes a prior will. The question of whether a will of movables has been revoked by marriage is governed by the law of the testator’s domicile at the time of the marriage: see Davies v Collins , 2011 NSCA 79. In Canada, jurisdiction over divorce is governed by the Divorce Act, RSC 1985, c 3 (2nd Supp) rather than domicile. A court in a province will have jurisdiction to hear and determine a divorce proceeding if either spouse has been habitually resident in the province for at least one year immediately preceding the com- mencement of the proceeding. Similarly, jurisdiction over matrimonial property claims is governed by pro- vincial legislation, rather than domicile. However, if a matrimonial property dispute involves a conflict of laws, a husband and wife’s rights to each other’s mov- ables will be governed by the law of the matrimonial domicile, unless there is no marriage contract. If the couple changed domicile after the marriage, the law of the new domicile will govern their movables. 2.2 Income Tax Residency In Canada, income tax liability is determined based on residence under the Income Tax Act, RSC 1985, c 1 (5th supp). Each year, a resident of Canada is sub- ject to taxation on their worldwide income, whereas a non-resident is taxed only on income from Canadian sources, including income earned from employment in Canada, income from a business carried on in Cana- da, and capital gains from the disposition of property in Canada. Under Section 250 of the Act, a person is deemed to have been resident in Canada during a taxation year if they sojourned in Canada for periods totalling 183 days or more. Because the term residence is not defined in the Income Tax Act, its meaning has developed through case law. Residence is a question of fact. The courts have held that an individual is ordinarily resident in Canada, for tax purposes, if Canada is the place where the individual normally or customarily lives, having regard to social relations (such as a spouse,
common-law partner, or dependants in Canada), interests, and conveniences. Determining residence requires consideration of all relevant circumstances, including residential ties with Canada compared to other countries, the length of time spent in Canada and abroad, and the purpose, intention and continuity of those stays. Pertinent residential ties may include the presence of a dwelling or personal property in Canada, or social or economic ties to the country. Domicile is not an independent basis for income tax residency under Canadian domestic law. Residence and domicile are distinct concepts. Residence is a question of fact, requiring only bodily presence as an inhabitant of a place, whereas domicile depends on the intention to make that place a fixed and permanent home: see Olson v Ontario (1992), 12 CRR (2d) 120 (Ont Ct J (Gen Div)). An individual may have more than one residence, but only one domicile. 3. Intestacy and Forced Heirship Laws 3.1 Intestate Succession In Canada, the distribution of an estate in the absence of a will is governed by provincial or territorial legisla- tion, and varies across jurisdictions. In most jurisdictions, the surviving spouse is enti- tled to a preferential share of the intestate estate. The value of this share varies widely, ranging from CAD350,000 in Ontario to CAD50,000 in Nova Scotia and Nunavut. In Ontario, Nova Scotia, Prince Edward Island, Yukon, Nunavut, and the Northwest Territo- ries, the preferential share is only payable to a spouse by marriage. In British Columbia, Manitoba, Alberta, and Saskatchewan, it may be paid to either surviving common-law spouses or spouses by marriage. The preferential share is only payable from assets forming part of the deceased’s estate, and should not be paid from assets that pass outside of probate. In addition to the preferential share, a surviving spouse is typically entitled to a distributive share of the remaining estate. In Ontario, if the deceased left one child, the spouse receives one half of the remain- ing estate, and the child receives the other half. If there is more than one child, the spouse receives one-third
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