Transferring financial assets abroad

[La Valette]

I am a Canadian citizen but I have lived abroad for nearly 50 years. A few years ago, I inherited an average sum of money from my Canadian parents, who always lived only in Canada. I have not accessed that money and just left it in an investment account in my name, waiting for my retirement when I would need to draw on it.

I have now reached that stage in my life, and want to transfer the money to the UK where I am domiciled, so that I can use it to top up my income in retirement. As I live abroad, tax on dividends has always been deducted and paid regularly to the Canadian Revenue Agency in the normal way by the investment company. So I do not owe anything.

I was in a conversation with a Canadian recently when this subject came up, and he said to me that if I transferred the money to the UK, I would be charged tax by the CRA simply because I was taking the money out of Canada. I am very surprised that this would be the case and have tried to find further information about this, but without success. Even the investment company cannot help me with this one.

I wonder if anyone could tell me whether this is truem and whether there is a special Canadian tax liability just for transferring the money abroad ? I fully appreciate that I would have to pay tax on any gains made from my investment portfolio in the normal way as I have been doing of course all along. But would I suffer an additional penalty just for sending the money abroad ?

If anyone could enlighten me or put my mind at rest, I would be very grateful.

 

[Naheulbeuck]

I am a Canadian citizen but I have lived abroad for nearly 50 years. A few years ago, I inherited an average sum of money from my Canadian parents, who always lived only in Canada. I have not accessed that money and just left it in an investment account in my name, waiting for my retirement when I would need to draw on it.

I have now reached that stage in my life, and want to transfer the money to the UK where I am domiciled, so that I can use it to top up my income in retirement. As I live abroad, tax on dividends has always been deducted and paid regularly to the Canadian Revenue Agency in the normal way by the investment company. So I do not owe anything.

I was in a conversation with a Canadian recently when this subject came up, and he said to me that if I transferred the money to the UK, I would be charged tax by the CRA simply because I was taking the money out of Canada. I am very surprised that this would be the case and have tried to find further information about this, but without success. Even the investment company cannot help me with this one.

I wonder if anyone could tell me whether this is truem and whether there is a special Canadian tax liability just for transferring the money abroad ? I fully appreciate that I would have to pay tax on any gains made from my investment portfolio in the normal way as I have been doing of course all along. But would I suffer an additional penalty just for sending the money abroad ?

If anyone could enlighten me or put my mind at rest, I would be very grateful.

It is half correct, there would be a deemed disposition of your investment at FMV and you would have to pay taxes on the difference between that Fair Market Value and the Book Value (the value when you acquired it plus any gains/losses and dividends on which you already paid taxes)

There are many factors to consider in this (type of investment, type of investment vehicle, amounts...) but there will definitely be tax implications.