First Time Tax Returns - Global Assets Issue

[Maly]

Since I came to Canada in Dec'10 and remained unemployed during the month, I am filing a tax form with zero income.
How about informing CRA about my property back home (primary residence)? I was told by a freind of mine that I do not
have to inform anything about my global property or ban accounts during the first year's filing (2010), but will have to include
these details during my tax filing during 2011. This info was apparently rovided by CRA call center. Is it correct? When we inform
them about it (property & bank account), what form to use? I could not locate it in the tax form.
Thanks for the guidance.

 

[Jonboy]

Yes, that is correct. You do not need to notify the CRA of foreign assets for the year you became tax-resident in Canada. If your foreign assets have a tax cost of more than $100,000 (their fair market value on the day you became tax-resident) you must complete a T1135 form for 2011 and mail this to the International Tax Services Office before April 30th, 2012. And for every subsequent year that you continue to own the foreign assets.

 

[Maly]

Thanks Johnboy. I called the CRA myself and they too confirmed the same opinion.

 

[agrisiva]

"As an individual (other than a trust) you do not have to file this statement for
the year in which you first become a resident of Canada."

Taken from.....page 2 of PDF file....

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html

 

[m_alihussain]

Hi !

I am Permanent resident landed in May 2010 and went back to home country to settledown personal matters like to resign from my empolyer and came back to Canada on Mar 2011. I just want to know that during this period b/w May 2010 and Mar 2011 i had empolyed at freign employer and earn income so should may i disclose to CRA that income pertaining to 2010 in 2010 return.

One more i would like to add here that during that period i have not taken or applied for benefits of Canada like Health card, GST/HST Credit etc but earn some income on saving account from canadain bank.

Anyone give comments on this issue.

 

[m_alihussain]

m_alihussain ,

you posted it in an incorrect thread. For example... "when did i become a Resident?" thread may be more related.

Anyways, your case looks like you don't even have to file any return for 2010, let alone owing any tax as you became a Resident only in March 2011, unless there are many other things that you didnt disclose. Did your spouse/dependents start living in Canada from May 2010?

Nope i m living alone !

 

[m_alihussain]

sorry m_alihussain, i missed your Savings a/c income information. With no residential ties, you may have to file the return for 2010 as a non-resident. It should be pretty easy with your bank interest as the only income.

but what abt social ties with Canadian bank account/credit cards & G1 driving licence but not health card !

 

[Jonboy]

Hi !

I am Permanent resident landed in May 2010 and went back to home country to settledown personal matters like to resign from my empolyer and came back to Canada on Mar 2011. I just want to know that during this period b/w May 2010 and Mar 2011 i had empolyed at freign employer and earn income so should may i disclose to CRA that income pertaining to 2010 in 2010 return.

One more i would like to add here that during that period i have not taken or applied for benefits of Canada like Health card, GST/HST Credit etc but earn some income on saving account from canadain bank.

Anyone give comments on this issue.

It is difficult to say for certain on such limited information but you likely did not become tax resident in Canada until March 2011 so there is no need to report 2010 income.

 

[toby]

Yes, that is correct. You do not need to notify the CRA of foreign assets for the year you became tax-resident in Canada. If your foreign assets have a tax cost of more than $100,000 (their fair market value on the day you became tax-resident) you must complete a T1135 form for 2011 and mail this to the International Tax Services Office before April 30th, 2012. And for every subsequent year that you continue to own the foreign assets.

Glad to see you’re back in the building, Jonboy; you’ve been absent for a while.

1) Is the address of the International Tax Services Office stated anywhere on the tax return?

2) Does the international Office not communicate with the regular office that assesses the general tax return? If they do communicate, why must the taxpayer send a separate document to the international Office?

 

[Yon Hanock]

This information is of course correctly, ha ha! To believe in return! ;D

 

[Jonboy]

Glad to see you're back in the building, Jonboy; you've been absent for a while.

I get busy sometimes!

1) Is the address of the International Tax Services Office stated anywhere on the tax return?

It is in the notes that come with the form.

2) Does the international Office not communicate with the regular office that assesses the general tax return? If they do communicate, why must the taxpayer send a separate document to the international Office?

It is a very good question and I don't have a satisfactory answer.


[/quote]

 

[Anik]

"As an individual (other than a trust) you do not have to file this statement for
the year in which you first become a resident of Canada."

Taken from.....page 2 of PDF file....

http://www.cra-arc.gc.ca/E/pbg/tf/t1135/README.html

So, it looks like new immigrants to not have to file this form with the first tax return (i.e. for the year they became residents). However, how should they answer the Yes/No about having foreign property over $100K on their first tax return ? Would it be appropriate to say Yes (if applicable to that year) and report relevant income (if any) but NOT file the T1135 form with that first return because of the above cited form filing exemption for first year immigrants?

Or should they say No in the first year, but then switch to Yes if still applicable for subsequent years ? The latter would seem wrong however the printed tax return says next to this question that 'If you answered yes you have to file the form"...- but i guess that is because it is a general T1 form for everyone, not just new immigrants...

 

[agrisiva]

Hi Anik, One idea is to simply call CRA and ask. I looked up my records. For my first year, I chose NO. Then from 2nd year onwards, I have been choosing YES.

 

[Anik]

Hi Anik, One idea is to simply call CRA and ask. I looked up my records. For my first year, I chose NO. Then from 2nd year onwards, I have been choosing YES.

I heard the same thing from some other people (on other forum)...And also heard the opposite view

So, they did not question the fact that assets "appeared" in the in the 2nd year but not the 1st?

I just managed to get through to CRA, the guy on the phone did not sound knowledgeable in this. He basically read me the back of the form (i.e. that not required to file in teh first year), but when I asked about the Y/N question itself, he was puzzled and was kind of 'maybe leave it blank?' but when I said that the program has Yes or No options only he was like 'we do not provide software support..."
So, was not really of much help :-(

 

[agrisiva]

I can see why CRA agent responded that way.

FYI, my first year was 2010, and to this day, they haven't questioned me why I started answering the question as YES from 2011 onwards.

Hope it helps!
.