The Basic Personal Amount or “tax free zone”

[shamrock21]

Hi, can The Basic Personal Amount or “tax free zone” of $10,....) be applied to non-resident's tax filing?

 

[lucky821]

It's a good question. Seniors please do advise.

 

[Suin]

The same here. Is the income generated from investments which is less than $10,000 taxed on reporting/filing (if there's no other income to report)?
Thanks for any inputs.

 

[shamrock21]

Hi, can The Basic Personal Amount or “tax free zone” of $10,....) be applied to non-resident's tax filing?

Any advice, please.

 

[Amadan123]

Hello,

Shamrock21, yes, this basic personal amount will apply to non-residents as well if their income from Canada represents 90% or more of their worldwide income.

Suin, yes, if your total taxable income, whether from investments and such, is less than the basic personal amount, then there will not be any income tax on it.

Just because there will not be any tax does not mean that you should not report your income and file a tax return altogether, however. For example, if you earn a specific type of investment income called capital gains, you are required to report and file an income tax return.

Madan Chartered Accountant team
www.madanca.com

 

[Suin]

Hello,

Shamrock21, yes, this basic personal amount will apply to non-residents as well if their income from Canada represents 90% or more of their worldwide income.

Suin, yes, if your total taxable income, whether from investments and such, is less than the basic personal amount, then there will not be any income tax on it.

Just because there will not be any tax does not mean that you should not report your income and file a tax return altogether, however. For example, if you earn a specific type of investment income called capital gains, you are required to report and file an income tax return.

Madan Chartered Accountant team
www.madanca.com

Thank you for your reply, Amadan123. Appreciate it a lot.

Just another follow-up question. If a Canadian citizen and a visitor to Canada have for example "a joint savings account", can a visitor pay the taxes on income generated on it?

 

[Amadan123]

Hello Suin,

Both the citizen and the visitor will have to report their part of the income on their respective income tax returns. In other words, it won't just be the visitor who will pay taxes on the income exclusively, but both.

Please let me know if you have any more questions.

Madan Chartered Accountant team
www.madanca.com

 

[Suin]

Hello Suin,

Both the citizen and the visitor will have to report their part of the income on their respective income tax returns. In other words, it won't just be the visitor who will pay taxes on the income exclusively, but both.

Please let me know if you have any more questions.

Madan Chartered Accountant team
www.madanca.com

Thank you for you reply. Could you please explain more - I am just trying to understand, if it is the same joint savings account (the same money), why both holders need to pay tax on it? Will not it be a double taxation?

 

[Amadan123]

No problem, please see example below.

Let's say you and X have a joint account in a bank, say RBC, where you and X hold 50% of the account each. That account earns total investment income from dividends, interest and capital gains in 2013 of $100. RBC will issue each of you a T5 slip for $100. RBC will also indicate on the T5 slip that the account is jointly held with X, and a name of the joint owner will be provided. 50% of the income on the T5 slip will be attributed to you and 50% will be attributed to X, respectively.

You and X will then report $50 of the income on your respective personal tax returns, because $50 is the only portion that is attributed to you.

I hope that helps.

Madan Chartered Accountant team
www.madanca.com

 

[Suin]

Thank you for you reply. These years my mother has not received any T5 slips for our joint savings. I guess that is mostly because she does not have a SIN # & that would explain it all. Do we need to apply for SIN # for her or it is not necessary as she is just a visitor here in Canada?
Can we choose who is paying the interest on all the income or it is up to the bank to decide?

 

[Amadan123]

Hello Suin,

Also, she may not have received a T5 slip perhaps because the income amounts were nominal.

She should apply for a SIN if she intends to be here a while, and would like to take advantage of some social/economic benefits. Keep in mind that if she visits and stays in Canada for more than 183 days in a year, she will be deemed a resident of Canada for the entire year for tax purposes.

Alternatively, you and your mother can simply obtain an Individual Tax Number (ITN) if the only reason you need an identification number is to file a tax return.

Madan Chartered Accountant team
www.madanca.com

 

[shamrock21]

Thank you for all your inputs, Amadan123. Appreciate it a lot.

 

[Amadan123]

You're quite welcome, shamrock21!


Madan Chartered Accountant team
www.madanca.com