Declare money outside of Canada during the first landing

[kaceyx]

Hi guys,

I would like to know if I have to declare all the money I have in foreign bank accounts at the time of landing in Canada. I have bank accounts in two foreign countries and will eventually bring the money to Canada.

Another question, I'm planning to travel back to my home country for a year before I settle down permanently, during this time I will be working and earning money from my current employer, So is there is a cut off time that I can transfer my money (Savings and earnings) to Canada without getting it taxed by the CRA?

Thanks,

Kacey

 

[Hurlabrick]

Hi guys,

I would like to know if I have to declare all the money I have in foreign bank accounts at the time of landing in Canada. I have bank accounts in two foreign countries and will eventually bring the money to Canada.

Another question, I'm planning to travel back to my home country for a year before I settle down permanently, during this time I will be working and earning money from my current employer, So is there is a cut off time that I can transfer my money (Savings and earnings) to Canada without getting it taxed by the CRA?

Thanks,

Kacey

No. You only have to declare m9ney you have on your person if it is over $10,000. You have to declare ALL overseas assets and money in your first full year tax return to CRA using CRA form T1135 once you have landed as settler.

 

[kaceyx]

No. You only have to declare m9ney you have on your person if it is over $10,000. You have to declare ALL overseas assets and money in your first full year tax return to CRA using CRA form T1135 once you have landed as settler.

Just to confirm, so if I land next month, staying for two week and return back to Canada after one year, I will be able to transfer my money during this period without getting it taxed?

What if some of my transfers happens after the end of April 2020 (Tax year), do these transfers get taxed or at which stage CRA starts to tax foreign transfers?

 

[Hurlabrick]

Just to confirm, so if I land next month, staying for two week and return back to Canada after one year, I will be able to transfer my money during this period without getting it taxed?

Yes

What if some of my transfers happens after the end of April 2020 (Tax year), do these transfers get taxed or at which stage CRA starts to tax foreign transfers?

You are not taxed on transfers. The company that carries out your transfers will make any necessary communication with Canadian authorities without you even knowing about it. My transfers take about 2 days to arrive in my Canadian bank account.

You MUST declare ALL overseas assets to CRA in your first full tax year using a T1135. You must also declare any interest / investment growth / income generated by these assets and you will be taxed on this (the original value of the offshore asset is NOT taxed). You can transfer assets at any time over any number of years (I am doing precisely this myself).​

 

[kaceyx]

Yes

You are not taxed on transfers. The company that carries out your transfers will make any necessary communication with Canadian authorities without you even knowing about it. My transfers take about 2 days to arrive in my Canadian bank account.

You MUST declare ALL overseas assets to CRA in your first full tax year using a T1135. You must also declare any interest / investment growth / income generated by these assets and you will be taxed on this (the original value of the offshore asset is NOT taxed). You can transfer assets at any time over any number of years (I am doing precisely this myself).​

If I understand this clause/FAQ correctly from the Government website, I think I don't need to file the T1135 during the first year of becoming a PR?

37. What is the reporting requirement for new immigrants? How is the cost amount determined for the property that was owned at the time of immigration to Canada?

An individual does not have to file Form T1135 for the tax year in which he or she first became resident in Canada. For a new resident, the cost amount of foreign property is its fair market value at the time he or she first became a resident in Canada. Use this fair market value in determining the new resident’s Form T1135 filing requirement in future years.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html#h11

 

[Hurlabrick]

If I understand this clause/FAQ correctly from the Government website, I think I don't need to file the T1135 during the first year of becoming a PR?

37. What is the reporting requirement for new immigrants? How is the cost amount determined for the property that was owned at the time of immigration to Canada?

An individual does not have to file Form T1135 for the tax year in which he or she first became resident in Canada. For a new resident, the cost amount of foreign property is its fair market value at the time he or she first became a resident in Canada. Use this fair market value in determining the new resident’s Form T1135 filing requirement in future years.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/foreign-reporting/questions-answers-about-form-t1135.html#h11

Residence in Canada for taxation purposes is not necessarily the same as residence to declare PR, or 'landing as settler'. In general, you will be liable to Canadian tax from the date you 'land as settler' (i.e. you do not pay Canadian tax if you do a soft landing and return to your country of origin to sell up, which is what we did).

On the date you land as settler, you MUST have your remaining overseas assets properly valued as at that date, you will then be liable to Canadian tax on GROWTH in the value of the asset from that date to every 31st December (end of Canadian tax year). So yes, you get the asset then revalued every 31st December as it says.

 

[kaceyx]

Residence in Canada for taxation purposes is not necessarily the same as residence to declare PR, or 'landing as settler'. In general, you will be liable to Canadian tax from the date you 'land as settler' (i.e. you do not pay Canadian tax if you do a soft landing and return to your country of origin to sell up, which is what we did).

On the date you land as settler, you MUST have your remaining overseas assets properly valued as at that date, you will then be liable to Canadian tax on GROWTH in the value of the asset from that date to every 31st December (end of Canadian tax year). So yes, you get the asset then revalued every 31st December as it says.

Yes, we are doing a soft landing this time and we will return back in a year time. So, are we excluded from any taxes until we return back as settlers? Is there is anything we need to fill to confirm our status in Canada (In this case soft landers and not final settlers)? Or that all is automated through the Immigration system (I mean they track when we left and when we will return back)?

I don't think there will be any additional/further growth in value/ assets after I settle down permanently in CA.

 

[Hurlabrick]

Yes, we are doing a soft landing this time and we will return back in a year time. So, are we excluded from any taxes until we return back as settlers?

Yes

Is there is anything we need to fill to confirm our status in Canada (In this case soft landers and not final settlers)?

From a CRA tax point of view I assume you mean? If so, then no.

Or that all is automated through the Immigration system (I mean they track when we left and when we will return back)?

No idea. CRA are not interested in you in your position until you are actually living here as a settler. As regards de-registering yourself from your country of origin and how long they will tax you, cannot say as I don't know what country you are talking about (I am only familiar with the UK, which has a 'double taxation agreement' with Canada).​

 

[kaceyx]

Yes

From a CRA tax point of view I assume you mean? If so, then no.




No idea. CRA are not interested in you in your position until you are actually living here as a settler. As regards de-registering yourself from your country of origin and how long they will tax you, cannot say as I don't know what country you are talking about (I am only familiar with the UK, which has a 'double taxation agreement' with Canada).​

Okay, thanks for your help!

One last question, I was reading here in the forum that if the money I have in my foreign bank is part of the proof of fund, I have to declare it in E677 form and get it stamped by the CBSA. Do you think I have to get this form filled in and shared with CBSA at the time of landing? Would this give me any benefit at a later point when I fill in the T1135 a year after I settle down?

Source:

https://www.canadavisa.com/canada-immigration-discussion-board/threads/help-with-funds-declaration-form-e677.156984/

 

[Hurlabrick]

Okay, thanks for your help!

One last question, I was reading here in the form that if the money I have in my foreign bank is part of the proof of fund, I have to declare it in E677 form and get it stamped by the CBSA. Do you think I have to get these form filled in and shared with CBSA at the time of landing? Would this give me any benefit at later point when I fill in the T1135 a year after I settle down?

Source:

https://www.canadavisa.com/canada-immigration-discussion-board/threads/help-with-funds-declaration-form-e677.156984/

Sorry, I have no idea as regards 'proof of funds' as we went through spousal sponsorship, which has no such requirement.

 

[kanu]

Great discussion and thanks for all the info. One question i have, if we get a bank account opened and put say $1000 there and get a Credit card and then go back to the origin country. Use the credit card to spend some money every month on say amazon gift card for ourself $5 and pay off before due date. And doing all this while not in canada for 2 yrs, do I become a tax resident? Do I need to file taxes every year in canada?

 

[Hurlabrick]

do I become a tax resident? Do I need to file taxes every year in canada?

No

Do I need to file taxes every year in canada?

No


I did pretty much this. Opened a bank account and got a credit card on one of my recce trips (I am the Canadian), then went back to the UK and used it occasionally in the 18 months until we landed for good. Still taxed in the UK. Nothing to file for Canada until you 'land as settler'.

 

[kanu]

I did pretty much this. Opened a bank account and got a credit card on one of my recce trips (I am the Canadian), then went back to the UK and used it occasionally in the 18 months until we landed for good. Still taxed in the UK. Nothing to file for Canada until you 'land as settler'.

Great, Thanks for sharing. Just building my credit history before I move next year permanently.

 

[Hurlabrick]

Great, Thanks for sharing. Just building my credit history before I move next year permanently.

Good idea.

Not sure what credit limit (if any) a Canadian bank will give you on a credit card in the first place though. Sometimes, they insist on pre-payment. For some reason, I got a credit card immediately with a $5k credit limit. Of course I got one as I could prove I was a Canadian citizen and also had a SIN - really not sure how they might treat someone who has not landed yet (as in I genuinely don't know, I am sure others will).

 

[kanu]

Good idea.

Not sure what credit limit (if any) a Canadian bank will give you on a credit card in the first place though. Sometimes, they insist on pre-payment. For some reason, I got a credit card immediately with a $5k credit limit. Of course I got one as I could prove I was a Canadian citizen and also had a SIN - really not sure how they might treat someone who has not landed yet (as in I genuinely don't know, I am sure others will).

Well my brother in law who si settled there in canada for many years suggested to open 2 accounts with cc to build up the credit history quickly. So i have 2 credit cards from rbc (2000) and Scotia (3000) with no safety deposit. Spending on $5 amazon gift card balance every month and paying on time. Will close one account after 1 yr free service is over. Lets see how it goes.