Bring money into Canada

[mizanmomo]

Hi,

I have received my PR visa along with my wife and baby boy. Now I am planning to move in Alberta at the end of 2009. When I filled my application forms, I mentioned I will bring CAD 50 000/= . Do I need to bring all the money with me when landing and have to show the Immigration officer? Can I bring CAD 17, 000/= cash and rest of them show my bank statement as a proof of fund? If I bring more money in Canada, do I need to pay tax for that money? What's the best way to bring money in Canada from UK? Any suggestion, thought or experiance, please advise me?

Thanks
mizanmomo

 

[rascojenkins]

I know you can show your bank statement when landing and tell the immigration officer that you'll tranfer the money as soon as you open a canadian bank account
Good LUck

 

[haver]

1) You don't have to bring all your money to Canada. It is your money. You can keep it wherever you want.
2) You should show to immigration officer that you have necessary minimum to live one year in Canada (17k is enough)
3) When you become a permanent resident in Canada you have to pay income tax for all income around the world.
50k-17k=33k - rest of your money is not taxable when you transfer it to Canada, but interest or other investment income is taxable.
4) If you have over 1mln you have to consider offshore immigration trust.

 

[CharlotteJ]

well, that is good to know,

if I understand this properly, we should better take along around 17K perhaps a max. of 20K to Canada at first and leave the rest behind for as long as it takes. Having that 17 or 20K on a Canadian bankaccount or saving account, would that mean it is due to taxes and as you describe it beautifully " taxable" too and do we have to declare or show how much money is left back home and whether or not to pay taxes due over that total amount of money?

I considerd to open both a bank account and a saving account at one of the best banks across Canada, to leave some of my money on the bank account itself and the rest of the money on the saving account and take all of my money out of the country where I now live.

That way I can start building up an interest rate at a Canadian bank and that way help Canadian economy better and avoid huge taxation on my income and resources here back home. After all, Europe is one of heavily priced places on this planet.

 

[haver]

Money you bring to Canada or leave back home is not taxable.
The earned income is taxable.

 

[max_lee]

Is the above true even if the income earned is in USA and you reside in Canada(Windsor) as you will be paying taxes in US as well for the income earned there, am asking this question as I am planning to shortly move to canada but continue my work in US(Detroit)

Thanks

Max

 

[jes_ON]

You will have to file in both countries, and report the US income earned (global income) on your canadian return. You then deduct the taxes you paid to the US (so you will have to do your US return first) from what you would owe in Canada - if what you would owe in Canada is higher than what you paid in the US, you will have to pay the difference.

You may be able to claim some deductions only in the US and some in Canada, some on either return (but not both). So it takes a bit of work to figure out the best strategy for overall tax burden. If you can afford it, might be wise to consult a tax professional at least the first year.

Is the above true even if the income earned is in USA and you reside in Canada(Windsor) as you will be paying taxes in US as well for the income earned there, am asking this question as I am planning to shortly move to canada but continue my work in US(Detroit)

Thanks

Max

 

[Suin]

Money you bring to Canada or leave back home is not taxable.
The earned income is taxable.

how can they know whether it's earned or savings?

 

[haver]

how can they know whether it's earned or savings?

If you earned money in USA defenitly they will know.
In general it is your responcibility to report your income.
If you don't disclose it today and CRA will figure out it later you will pay much more...

 

[toby]

If you have $50K in a bank account, that is capital, and is not taxable. Presumably you were taxed in the "old" country, and the $50K is yours.

Once you become a Canadian taxpayer, you are taxed on any interest earned on that $50K, whether it is in an offshore bank account or in a Canadian bank account.

If your money is earning interest in (say) the USA, you will pay taxes to the US government. Since Canada and the USA have a tax treaty, you calculate the taxes payable to Canada, but deduct the taxes already paid on that interest to the US government, and if there's any extra due to Canada, that's what you pay.

 

[bubs1121]

Is it better just not declare your accounts or money saved offshore so you don't pay taxes? They can't prove it anyway as almost all countries have Bank Secrecy Law. Is it unfair to tax the money you didn't earn in Canada?

 

[toby]

Th decision to hide assets overseas is one you and only you can make. If you have more than $100,000 abroad, you are required to indicate it on your tax return. The tax return itself is rather general, so you don't actually have to show offshore bank statements.

If you don't indicate that you have over $100,000 abroad, that constitutes a lie, which is a criminal offence, and something you should consider very carefully before acting.

I sympathize with your thought that tax on worldwide income -- that Canada had nothing to do with helping you make -- seems unfair. Most "developed" countries do it, though, so there's no use complaining.

And it will get worse, not better: as baby boomers stop working and paying taxes, government will need more taxes to fund its operations and social programs.

But just to clarify, if you have (say) $150,000 abroad, that itself is not taxable -- only income earned by that $150,000 is taxable. If your money abroad earns interest, the interest is taxed a lot; dividends and capital gains are taxed much less. A quick session with one of the cheap income tax programs will sort this out for you quickly.

Welcome to Taxada.

 

[bubs1121]

OK Toby, just for clarification. If I have say 150k offshore and there's no specific earning yet for that year, does that means there's no need to declare it? Example, if I invest the 150k to mutual funds, and hold it for 2 years, I will never get an earnings in 2 years from that investment until I redeem it. Do I still have to declare it in those 2 years?

 

[jes_ON]

All interest is "income", as are dividends.

150K offshore earning no interest?

Mutual funds with no dividends for 2 years?

Not likely I think that would be suspicious, to say the least. Even if it gets rolled back into the account it is still income earned

Let's say, like many others, your account lost value over the past year - you would be able to deduct losses. Carrying costs, too.

Not that I have offshore accounts, others would have more insight on their tax advantages.

 

[toby]

OK Toby, just for clarification. If I have say 150k offshore and there's no specific earning yet for that year, does that means there's no need to declare it?

You don’t have to declare investment income if it was not declared by the fund company, but you would still have to indicate in your tax return that you have that much stashed abroad.

But Jes-On makes a good point that mutual funds commonly declare dividends to their investors, and (in Canada) that worldwide income is taxable whether you elect to receive it or reinvest it.

Thisis true for in-Canada mutual funds, and offshore fund too. If your funds are in a non-tax regime that does not issue tax receipts, then you might have a problem satisfying CRA about whether there was income, and its nature (dividends, capital gains, interest).

There are mutual funds in Canada organized as corporations, that defer dividends and capital gains until the investor actually takes money out of the fund. Their admin costs are higher, but it might make sense to pay these higher costs (about .5% per year) to defer taxes. Only your tax bracket will tell you this.

The advantage of Canada-side mutual funds is that they issue tax receipts that CRA is familiar with. So you get no argument from CRA about taxable distributions. But if the offshore fund is in a no-tax regime, the find company won’t therefore issue tax receipts, and CRA has been trying (with mixed success) to make life miserable for these investors.

If you just play “hide and seek”, that’s a lifetime strategy that is difficult to sustain , and very difficult to unwind once you have begun.