Canadian tax on foreign income

[sgtch]

Hi,
I would really appreciate it if someone can help me out here.
I am an Indian citizen, on an H1B, working in a SV based company. My wife and I recently got ITA for Canadian PR in the FSW stream (Round 65, she is the primary applicant). Our plan is to (assuming nothing goes wrong in our application) land in Canada to activate our PR sometime during the summer of 2018 and then move permanently to Canada after a couple of years; say around late 2020/early 2021, so as to meet our residency obligation. We do not have any relatives in Canada, nor do we own any property/ have any address in Canada.
I have a couple of questions:
1. From 2018 to the time we finally move to Canada, will we have to pay Canadian tax on our US income?
2. When we do move to Canada, how do we move our US savings? Will that be taxed at that point? Or can we move our savings to Canada tax free?
Looking forward to replies from anyone who has knowledge about such situation. Thanks.

 

[canuck_in_uk]

I have a couple of questions:
1. From 2018 to the time we finally move to Canada, will we have to pay Canadian tax on our US income?
2. When we do move to Canada, how do we move our US savings? Will that be taxed at that point? Or can we move our savings to Canada tax free?

1. No. You will not be residents for tax purposes during that time.

2. You will not be taxed on money you bring to Canada. The method you use to bring it here is up to you.

 

[andyding13]

One suggestion, you can wait until the last few days on your immigrant visa to land (This day should be 1 year from your medical). So your 5-year residency obligation window could start later.

 

[sgtch]

1. No. You will not be residents for tax purposes during that time.

2. You will not be taxed on money you bring to Canada. The method you use to bring it here is up to you.

Hi.....thank you for your reply. I have a follow up question in regards to your 2nd question. Is there any information online about various methods by which you can transfer foreign income to Canada? I am not talking about proof of funds, but entire savings, which is likely to be substantial. Can I open a Canadian bank account and transfer all the money from US bank account for free?

 

[sgtch]

One suggestion, you can wait until the last few days on your immigrant visa to land (This day should be 1 year from your medical). So your 5-year residency obligation window could start later.

Yes...my timeline is not fixed. I will probably delay the activation date as much as possible.
Would you happen to have any information about methods to transfer foreign income (in US banks) to a Canadian bank? Can I transfer any amount of money for free?

 

[Gini]

Hi.....thank you for your reply. I have a follow up question in regards to your 2nd question. Is there any information online about various methods by which you can transfer foreign income to Canada? I am not talking about proof of funds, but entire savings, which is likely to be substantial. Can I open a Canadian bank account and transfer all the money from US bank account for free?

Yes, absolutely. You just open a Canadian bank account and do an online transfer from your US bank account. There might be a small fee charged for an international transfer (like 20 USD max), but that is it. There is no tax implication from just transferring money. Depending on how much you are transferring, there might be a daily limit, for most of my bank accounts the daily limit is 50k, so if you are transferring a larger amount you may need to do it over several days. But that's it really. If it is a very large amount, the incoming bank may ask you questions about the source of the funds...there is usually a certain threshold that triggers anti-money-laundering checks. But these are pretty standard and nothing to worry about really. If you are transferring into Canadian Dollars from USD and it is a large amount, alert your Canadian bank in advance, maybe they can give you a preferential exchange rate.

 

[sgtch]

Yes, absolutely. You just open a Canadian bank account and do an online transfer from your US bank account. There might be a small fee charged for an international transfer (like 20 USD max), but that is it. There is no tax implication from just transferring money. Depending on how much you are transferring, there might be a daily limit, for most of my bank accounts the daily limit is 50k, so if you are transferring a larger amount you may need to do it over several days. But that's it really. If it is a very large amount, the incoming bank may ask you questions about the source of the funds...there is usually a certain threshold that triggers anti-money-laundering checks. But these are pretty standard and nothing to worry about really. If you are transferring into Canadian Dollars from USD and it is a large amount, alert your Canadian bank in advance, maybe they can give you a preferential exchange rate.

Thanks a lot bro . This information has been really helpful.