Bringing in funds and tax-free vs taxed

[redfox05]

Hi all,

Just attended the CIIP session, and Im CONFUSED.
People in the session (Attendees) were saying that money you take with you when you land in Canada you can bring tax free, but then anything after that is liable for tax. Is that correct??

This in one way makes sense, as its "income", but then again, I paid "income tax" in the UK on that money, as its my savings which I earned from my salary and paid UK income tax on.

Surely this must be a question everyone is dealing with when they move to Canada, so have I just totally misunderstood it?

Im flying on 10th July (This Sunday) so need to know ASAP if I need to bring money with me. I was planning on using one of my UK bank cards that dont have international transaction fees, and just going to an ATM whenever I need it, until I get a Canadian income to support me.

But when I buy a house, or furniture, I will need to use my UK savings. But I don't want to be taxed AGAIN on top of my UK income tax I already paid on those savings.

I know im rambling a bit, apologies, hope someone can advise.

 

[pfse]

Hi all,

Just attended the CIIP session, and Im CONFUSED.
People in the session (Attendees) were saying that money you take with you when you land in Canada you can bring tax free, but then anything after that is liable for tax. Is that correct??

This in one way makes sense, as its "income", but then again, I paid "income tax" in the UK on that money, as its my savings which I earned from my salary and paid UK income tax on.

Surely this must be a question everyone is dealing with when they move to Canada, so have I just totally misunderstood it?

Im flying on 10th July (This Sunday) so need to know ASAP if I need to bring money with me. I was planning on using one of my UK bank cards that dont have international transaction fees, and just going to an ATM whenever I need it, until I get a Canadian income to support me.

But when I buy a house, or furniture, I will need to use my UK savings. But I don't want to be taxed AGAIN on top of my UK income tax I already paid on those savings.

I know im rambling a bit, apologies, hope someone can advise.

No, you only need to pay taxes from everything (well, almost) you earned after became resident of Canada (pay attention, CRA interprets "resident of Canada" differently then IRCC). For example, if you have some money on offshore bank account, then you need to pay taxes for every interest paid to you at this account from the day you became resident of Canada, but you don't need to pay taxes for any money you had on this account before you became a resident (but you need to declare it when you enter Canada).

 

[redfox05]

Ah perfect! Thanks pfse, for that super super fast reply.

So just "income" on the savings will be taxed. Good. With Brexit, I dont exactly want to convert my pounds into anything else right now, as the value has gone down.

As for your note about declaring it, I only know about the goods accompanying form, or following you later. Where do you declare your money in your "old" country? Does that mean I need to gather statements for all my UK bank accounts before I land? I fly on 10th July, so im running out of time....

How do I declare it, and what if I dont declare it all (purely as I have several old accounts and might miss some, I'm still trying to trace all my old savings accounts as we speak), what does that mean for me?

 

[torontosm]

As for your note about declaring it, I only know about the goods accompanying form, or following you later. Where do you declare your money in your "old" country? Does that mean I need to gather statements for all my UK bank accounts before I land? I fly on 10th July, so im running out of time....
How do I declare it, and what if I dont declare it all (purely as I have several old accounts and might miss some, I'm still trying to trace all my old savings accounts as we speak), what does that mean for me?

You don't need to worry about declaring any overseas assets upon landing. Rather, when you complete your first Canadian tax return, it will ask you if you have assets overseas with a value in excess of $100,000. That is your opportunity to declare whatever you have.

 

[redfox05]

Ahhhhhh. Phewwww. More sigh of relief. So did I just read the below wrong?

you don't need to pay taxes for any money you had on this account before you became a resident (but you need to declare it when you enter Canada).

 

[pfse]

Ah perfect! Thanks pfse, for that super super fast reply.

So just "income" on the savings will be taxed. Good. With Brexit, I dont exactly want to convert my pounds into anything else right now, as the value has gone down.

As for your note about declaring it, I only know about the goods accompanying form, or following you later. Where do you declare your money in your "old" country? Does that mean I need to gather statements for all my UK bank accounts before I land? I fly on 10th July, so im running out of time....

How do I declare it, and what if I dont declare it all (purely as I have several old accounts and might miss some, I'm still trying to trace all my old savings accounts as we speak), what does that mean for me?

When crossing the border, you need to declare only money you're bringing with you (only if you bring $10000 CAD or more). Now the Canadian taxation system (CRA) is based on self reporting - you must submit tax declaration and pay your taxes. CRA basically trust you. For the first year of settlement you don't need to disclose you offshore asset, but you still need to pay taxes from any capital gain or income generated by this asset. For subsequent years you need to disclose any offshore asset (property, bank accounts, shares, etc) valued $100000 CAD or more and pay taxes from everything you earn from any offshore asset you have (you need to check about tax treaty between Canada and UK to avoid double taxation). Usually CRA don't ask about the source of money you bring to Canada by wire transfer in the first year of residency. But banks in Canada must report to CRA about any amount of money incoming to your account if it more then $10000 CAD, so CRA may ask you to explain source of the money.

 

[redfox05]

When crossing the border, you need to declare only money you're bringing with you (only if you bring $10000 CAD or more). Now the Canadian taxation system (CRA) is based on self reporting - you must submit tax declaration and pay your taxes. CRA basically trust you. For the first year of settlement you don't need to disclose you offshore asset, but you still need to pay taxes from any capital gain or income generated by this asset. For subsequent years you need to disclose any offshore asset (property, bank accounts, shares, etc) valued $100000 CAD or more and pay taxes from everything you earn from any offshore asset you have (you need to check about tax treaty between Canada and UK to avoid double taxation). Usually CRA don't ask about the source of money you bring to Canada by wire transfer in the first year of residency. But banks in Canada must report to CRA about any amount of money incoming to your account if it more then $10000 CAD, so CRA may ask you to explain source of the money.

ok thanks.

And when they come asking about the source, I presume they will then also ask about the interest that that money/source may have been earning abroad.
So from the day of PR, I'll have to keep track of this for all savings accounts, loans, shares, dividends etc correct?
OR, just move everything in the UK into one savings/share/investment account (where possible) and make it easier to track interest?
OR, what if I move it all out of savings accounts and into shares, then I just need to track dividends interest and capital gains correct? That sounds easier (shares are riskier though I know).

 

[pfse]

ok thanks.

And when they come asking about the source, I presume they will then also ask about the interest that that money/source may have been earning abroad.
So from the day of PR, I'll have to keep track of this for all savings accounts, loans, shares, dividends etc correct?
OR, just move everything in the UK into one savings/share/investment account (where possible) and make it easier to track interest?
OR, what if I move it all out of savings accounts and into shares, then I just need to track dividends interest and capital gains correct? That sounds easier (shares are riskier though I know).

Yeh, reporting offshore asset/income and calculate tax is a bit of pain. If you don't have any big gain from your offshore asset, you don't use it and you are not planning to go back to your home country, it's not worth to keep it, I think.

 

[redfox05]

Yeh, reporting offshore asset/income and calculate tax is a bit of pain. If you don't have any big gain from your offshore asset, you don't use it and you are not planning to go back to your home country, it's not worth to keep it, I think.

I don't want to move it all out of the UK until the UK Pound is stronger. Right now it's quite weak due to all the Brexit stuff. Value has dropped by 10%. At this rate, its better to take out a Canadian Loan / Personal Line of Credit, and use that until my salary comes in. If I can get a rate at around 3-4%, then thats much better than using UK funds which have dropped 10% in value.