Coming to Canada as a PR/Bringing money - time or amount limit?

[tdawg]

My parents are coming to Canada as PR this spring. They already have a house here, close by to me but they are also keeping 2 of their condos back home. My grandmother is still living, so they will have to go back every 2-3 months to look after her etc...

I know that when you first come to Canada you can bring any amount of money and it's non-taxable as you've already paid tax on it at some point. Do you declare how much you are bringing in and at which point? Will the immigration officer ask for it at the first point of entry? If you are bringing 5k in cash and say you have 50k back in your home country as well as two condos/cars or other property that you are planning to sell at a later date and bring that money into Canada? How do you go about properly declaring this/notifying the officer and do you need to bring any proof that you indeed own this etc....I presume it then also needs to be translated? Do you need papers saying how much it's worth ...how complicated is this process?

They also have some savings at a bank in a safety deposit box - during the instability of the banking system in their home country it's unsafe to keep your money in the account in case the banks collapses, so how do they prove how much money they have in that safety deposit box etc?

I just wanted to find out if there's anything my parents need to know/do if they come now and want to bring the rest of their savings to Canada 3 years from now?

Thanks a lot for any information you can provide.

 

[steaky]

No, actually you can bring any amount of money anytime, regardless the first you come to Canada or any future date. Only income is taxable.

You have to declare any amount over $10,000, otherwise you will be fined. If you are flying on a international flight, you would be given a form to declare. If you are driving, the immigration officer might ask you about it or you can disclose it.

For any assets you left outside Canada, declare them in your/parents' Canadian tax return (your world income is taxable subject to tax treaties between Canada and that country). If you/parents sell them while you/parents are tax resident of Canada, then report the gain/loss in the Canadian tax return.

 

[tdawg]

Thank you! So when they arrive here the first time they declare only the money they bring in cash with them? If they plan to wire the money to themselves a year later, they don't need to do anything other than to declare it in their tax return that year? Is there a section where you declare assets outside of Canada on your tax return, do you need to specify approx value? What is the purpose of specifying you own a condo in your tax return?

Just to clarify, if they sell their assets two years from now and get 100k for it, they have to declare 100k as income and pay tax on it here in Canada? Or did I misunderstand? What is considered a gain/loss when it comes to assets?

If they sell it now and bring 100k with them when they arrive they won't need to pay tax for it? But if they do the same 3 years from now then it's taxable?

 

[steaky]

Not only cash but any monetary instruments equal or greater than $10,000

http://www.cbsa-asfc.gc.ca/publications/pub/bsf5056-eng.html#s4x10

If they wire money, don't declare it in their tax return. The bank will report this to the taxman directly.

Yes there is a section where you declare foreign assets in a tax return. You need to estimate the value of those assets at the time you move to Canada. You need to estimate so that you can know how much you gain or loss in the future. For example, one asset was value $100K at the time you immigrated and it was sold for $150K later on. The gain would be 150K minus 100K = 50K. If it was sold for $50K, then there would be a loss of 50K. You would then report this capital gain / loss in your Canadian tax return. I suggest you read this website for details:

www.cra.gc.ca

Yes if they sell it now and bring 100K with them, they don't need to pay tax to Canada. Nor do they need to pay if they are non residents for tax purposes.

 

[tdawg]

I found all the answers by looking up foreign assets as you suggested. I also read through the CRA website.

This is what I understood: They don't need to report foreign assets fo the first year they are here as well as - only need to report it when/if they sell it and make money or lose money (as compared to value of the property at the time you became resident) OR if they rent it out -> which makes it an income. Makes sense.

The assets can be sold at any point and taxes are paid only on the gained.

I am just wondering if they should obtain some sort of documentation prior to coming here stating approx value of condos, bank accounts, vehicles and other assets. What sort of documents does the CRA usually require to validate etc?

Thanks for your help and your time!

 

[vermas]

Dear steaky,

I have somewhat similar issue. I immigrated to Canada in Aprl 2013 and have been here for almost a year. I left approx CAD 12.0K in the bank fixed deposit and apprx CAD 13.0 in Mutual Funds in India. Till date, I have not notified the bank and the mutual funds AMCs regarding change of my status from Resident Indian to Non Resident Indian. My father is the joint holder in the bank account. In maturity, the FD amount will be creditted to my bank account next month. I also intend to redeem my mutual fund holdings at the same time. Kindly advise how can I have this money belonging to me repatriated to myself in Canada. What could be the tax implications in India and Canada on this apprx CAD 25.0K amount.

Your help and guidance will be greatly appreciated.

Regards,

Sunny

 

[seton]

Note the $10,000 declaration is not taxable - it is for anti-money laundering laws. Any principal amounts cash equivalents you bring to Canada are not taxable. Interest income on the principal is taxable as a resident. Assets are taxable based on the capital gains after disposition, based on the value from when you became a resident. Eg:

You owned a house which you paid $100 for. When you became a resident, your house was valued at $250. You later sold the house for $275 - you would only be taxed for $25 ($275-$250) as a capital gain in Canada (simplified example).

 

[sinestra]

Steaky and Seton.

Thank you very much.

 

[Hasni]

Note the $10,000 declaration is not taxable - it is for anti-money laundering laws. Any principal amounts cash equivalents you bring to Canada are not taxable. Interest income on the principal is taxable as a resident. Assets are taxable based on the capital gains after disposition, based on the value from when you became a resident. Eg:

You owned a house which you paid $100 for. When you became a resident, your house was valued at $250. You later sold the house for $275 - you would only be taxed for $25 ($275-$250) as a capital gain in Canada (simplified example).

Seton, the example of house that you have given is the house that I have back home and not in Canada. If so, when and where is it that we need to declare its present value so that when we sell it in future, we could mention about any gain or loss and could pay tax accordingly ! Thanks

 

[OhCanadiana]

I found all the answers by looking up foreign assets as you suggested. I also read through the CRA website.

This is what I understood: They don't need to report foreign assets fo the first year they are here as well as - only need to report it when/if they sell it and make money or lose money (as compared to value of the property at the time you became resident) OR if they rent it out -> which makes it an income. Makes sense.

The assets can be sold at any point and taxes are paid only on the gained.

I am just wondering if they should obtain some sort of documentation prior to coming here stating approx value of condos, bank accounts, vehicles and other assets. What sort of documents does the CRA usually require to validate etc?

Thanks for your help and your time!

For the condos and other property, an assessment of the property value on the date they become fiscal residents of Canada (e.g., the day they land if they are moving that same day). For bank accounts, keep track of the trade value on the date of arrival in Canada (as if the assets had been acquired on the date they assume fiscal residency).

Seton, the example of house that you have given is the house that I have back home and not in Canada. If so, when and where is it that we need to declare its present value so that when we sell it in future, we could mention about any gain or loss and could pay tax accordingly ! Thanks

You'll declare it in your second Canadian tax return, assuming you still own the property at any time during the second Canadian fiscal year.

 

[Hasni]

Oh Canadiana, bit unclear,...meaning its solely upto us what value we tell, ...likewise after we sell it, again its upto us if we declare a gain or loss ! If this is how it goes, I guess there is no way one can know if someone is truthfull or...!

 

[OhCanadiana]

Oh Canadiana, bit unclear,...meaning its solely upto us what value we tell, ...likewise after we sell it, again its upto us if we declare a gain or loss ! If this is how it goes, I guess there is no way one can know if someone is truthfull or...!

No! It's a matter of fact, not opinion. You need to keep track of, and declare, the fair market value on the day you become a fiscal resident of Canada.

To elaborate on my examples above: for publicly traded assets (e.g., stock), look up the value on the day you become a fiscal resident and keep copies of your statements showing your holdings (i.e, how many you held on the day you landed). That number is freely available and everyone has access to it. In contrast, for real estate, where the value is not freely available, the market value can be determined by an appraisal done by an authorized individual (not you, not a realtor, etc) and keep that document.

 

[Hasni]

No! It's a matter of fact, not opinion. You need to keep track of, and declare, the fair market value on the day you become a fiscal resident of Canada.

To elaborate on my examples above: for publicly traded assets (e.g., stock), look up the value on the day you become a fiscal resident and keep copies of your statements showing your holdings (i.e, how many you held on the day you landed). That number is freely available and everyone has access to it. In contrast, for real estate, where the value is not freely available, the market value can be determined by an appraisal done by an authorized individual (not you, not a realtor, etc) and keep that document.

thanks for clarification, I have put all my assets (house, car, pice of land etc) with expected value on the goods to follow list. Do I still need to get the present value of my property through an authorized agency / individual or the value that I have mentioned in the goods to follow will do ? How about the cars, do they also need to be evaluated same way ! Thanks

 

[OhCanadiana]

thanks for clarification, I have put all my assets (house, car, pice of land etc) with expected value on the goods to follow list. Do I still need to get the present value of my property through an authorized agency / individual or the value that I have mentioned in the goods to follow will do ? How about the cars, do they also need to be evaluated same way ! Thanks

The Personal Effects Accounting Document (B-4 and B-4A) are used to declare the goods that you will import at the time you move to Canada for at least 12 months or the goods that you already have owned, used, and possessed that you will import at a later time (goods to follow). You turn this in to CBSA.

The assets outside of Canada (e.g., bank accounts, condos, etc) you will declare to CRA, with your tax return, once you are a Canadian resident.

 

[friendof2005]

Dear steaky,

I have somewhat similar issue. I immigrated to Canada in Aprl 2013 and have been here for almost a year. I left approx CAD 12.0K in the bank fixed deposit and apprx CAD 13.0 in Mutual Funds in India. Till date, I have not notified the bank and the mutual funds AMCs regarding change of my status from Resident Indian to Non Resident Indian. My father is the joint holder in the bank account. In maturity, the FD amount will be creditted to my bank account next month. I also intend to redeem my mutual fund holdings at the same time. Kindly advise how can I have this money belonging to me repatriated to myself in Canada. What could be the tax implications in India and Canada on this apprx CAD 25.0K amount.

Your help and guidance will be greatly appreciated.

Regards,

Sunny

Hi Sunny,

I want to know whether you got ans to your question above coz I too have a similar situation. please let me know, your reply will be appreciated