Money outside Canada: is it taxable?

[mattjp1]

Good morning everyone,

I am not familiar with the Canadian tax system yet and would like to make things right from day 1 (landing in March) and not make any mistake when declaring my assets.

Since we are all new comers, it is normal that most of us have money on bank accounts/plans outside Canada.

Do we have to declare and do we pay taxes on:

- Money that is on deposit accounts, outside of Canada (not earning interest here or very little)
- Retirement/investment pension plan/, outside of Canada (earning interests here, which is the goal, however the money is not cash and not available before a 25 years term)

Any advice is appreciated.

Thanks
matt

 

[steaky]

Declare them in annual tax return only if cost are more than $100,000

 

[mattjp1]

Thanks for the reply steaky, however is that 100k for each account or cumulative (like if all accounts add up to 100k then we have to declare it).

Alternatively, I am thinking to book an appointment with Canada Revenue Agency after I land. Would they advise me or do usually people have to go through tax lawyers etc...?

 

[steaky]

You can phone Canada Revenue Agency before you land. They have a toll free number.

 

[mattjp1]

Will do for sure, thanks.

 

[NetMecca]

Foreign income is taxable, pre existing foreign assets typically not. There may be some international tax agreements to avoid you having to pay double tax in both countries. I would suggest that you retain the services of a tax account with international tax experience, to get a definitive answer on your situation

 

[mattjp1]

Foreign income is taxable, pre existing foreign assets typically not. There may be some international tax agreements to avoid you having to pay double tax in both countries. I would suggest that you retain the services of a tax account with international tax experience, to get a definitive answer on your situation

Yes I will most probably call Canada Revenue Agency to have an idea and after I land, consult with a tax lawyer.

- For the foreign savings account, I have decided to transfer my funds to Canada anyway (deposit insurance scheme in Canada is 100K, quite reassuring for a savings account).

- For the investment/pension plan, that's where my problem is. I understand all income are taxable, however this is technically not an immediate income since I can't access the money so easily.
Now, if after clarification it becomes taxable, I will probably look at in-Canada investment/pension plan.

 

[NetMecca]

Yes I will most probably call Canada Revenue Agency to have an idea and after I land, consult with a tax lawyer.

- For the foreign savings account, I have decided to transfer my funds to Canada anyway (deposit insurance scheme in Canada is 100K, quite reassuring for a savings account).

- For the investment/pension plan, that's where my problem is. I understand all income are taxable, however this is technically not an immediate income since I can't access the money so easily.
Now, if after clarification it becomes taxable, I will probably look at in-Canada investment/pension plan.

Sounds complicated. My advice is to move it asap. Currency fluctuations will likely wipe out any gains you get from leaving it outside Canada. There are some good investment options in Canada, including self managed retirement funds which include investment on the US and Canadian stock exchange if you like. I have done pretty well on Canada Exchange.

You definitely need an accountant with international expertise available. Try BDO. Expensive but international.

 

[mattjp1]

Sounds complicated. My advice is to move it asap. Currency fluctuations will likely wipe out any gains you get from leaving it outside Canada. There are some good investment options in Canada, including self managed retirement funds which include investment on the US and Canadian stock exchange if you like. I have done pretty well on Canada Exchange.

You definitely need an accountant with international expertise available. Try BDO. Expensive but international.

Thank you for the recommendation.

 

[metoo]

Good morning everyone,

I am not familiar with the Canadian tax system yet and would like to make things right from day 1 (landing in March) and not make any mistake when declaring my assets.

Since we are all new comers, it is normal that most of us have money on bank accounts/plans outside Canada.

Do we have to declare and do we pay taxes on:

- Money that is on deposit accounts, outside of Canada (not earning interest here or very little)
- Retirement/investment pension plan/, outside of Canada (earning interests here, which is the goal, however the money is not cash and not available before a 25 years term)

Any advice is appreciated.

Thanks
matt

If you bring in all the money along when landing in canada, it will not be taxed. If you do not bring it along, you should declare it in your landing forms as funds that you will be bringing in later. Any interest earned on this should be declared as foreign income after you land. If you pay taxes on that income in that country, you will probably not have to pay any taxes in canada on this income. But you will be required to declare it as canada considers your global income for tax purposes.

 

[bafonso]

If you bring in all the money along when landing in canada, it will not be taxed. If you do not bring it along, you should declare it in your landing forms as funds that you will be bringing in later. Any interest earned on this should be declared as foreign income after you land. If you pay taxes on that income in that country, you will probably not have to pay any taxes in canada on this income. But you will be required to declare it as canada considers your global income for tax purposes.

The main point here being that unless you are selling your stocks/assets and made a profit, you aren't going to be taxed given you aren't making any profit. If you have savings account until you release them you also are not profiting, so, not taxable. The tricky thing with savings accounts is that moving them into Canada will affect your income since and it can play out in your favor or not. See the notes at the end here: http://www.howlandtax.com/answers/05Sept21.htm

It's not clear to me if it's not better approach just leave your retirement funds if we're talking about large sums of money. This way you could avoid the penalty fee in the original country as well as funds withholding some countries apply. (US is 20%).

 

[mattjp1]

Thanks guys for the reply. I haven't had the chance to speak with CRA yet (I live in Japan and timezones are the opposite). But I'll update here when I do.