They jointly one a residence in BC and also one in Manitoba.
My assumption was when they bought the place in BC they both would retire there (guess that makes me an ASS). For the last few years I have been filing them both as BC residents. Now the husband wants to apply for a provincial medical benefit in MB.
So, Question is can a married couple have separate principle residences in different provinces? And if so, how do you file that?
I think definition of married couple might be changing (in society). Wife is telling me that living separately for most of the year is the best for there relationship for both medical and psychological reasons.
Two separate issues arise:
Residency for provincial tax purposes, and Principal Residence for PRE/Cap Gains purposes
Treatment of each is somewhat different. But there is no issue in having married couples with each of those being the same, different or unrelated as long as the specific rules of each are followed.
Residency for provincial tax purposes is a matter of fact. Was spouse A resident in MB on Dec 31 – did he actually live in the MB house, spend most of his time there etc? If so…MB resident. (There are a few tax cases on this…can’t think of names offhand but can be found on CanLII.)
PRE is a mixed matter of fact and election. Can’t claim PRE if not resident in the location at some point…but by election can also be resident elsewhere part of the time (eg S 45(2)).
What I do: Ask each party to write you a history of their residency. Then review the fact basis and establish a position for tax.
For CRA purposes they have to choose one location based on facts not desires. The facts would include in which province do they have the strongest residential ties, work would not be a factor as many spouse go off to work elsewhere.