The money received after PR card issued is subject to Canadian taxation

[littlekyle]

Hi all,

I've heard that the immigrant can bring or transfer any officially declared money to Canada during his/her landing but after he/she get the PR card, any amount received should be subject to taxable income according to new Canadian law.

Any comment on that from seniors?

Many thanks.

 

[PMM]

Hi

Hi all,

I've heard that the immigrant can bring or transfer any officially declared money to Canada during his/her landing but after he/she get the PR card, any amount received should be subject to taxable income according to new Canadian law.

Any comment on that from seniors?

Many thanks.

You heard wrong. The only money that would be taxed after you establish your self as a tax resident is interest earned overseas, or if you owned a house/business which you sold later, the gain after residency would be taxable as capital gains..

 

[littlekyle]

Hi PMM,

Thanks for your quick reply.

The scenario could be as follows:

You will move to Canada for settlement with the cash of 5000 usd each. During the period where you don't yet get job in Canada, you still rent (1) your house at your home country to finance your living cost in Canada. Suppose 6-9 months or 1 year later, you get PR card, so you intend to buy a house in Canada and you have to sell your house and transfer (2) money to Canada to finance your new house. The questions are below:

(1) your rental amount monthly transferred to your account in Canada is taxable?
(2) your money from sales of your house transferred one time to your account in Canada is taxable?
(3) I don't understand what a "tax resident" means. Is it after PR card or citizenship?

As we are preparing for our landing expected in mid-2012 and don't know about Canadian regulations, your instructions/advices are very precious with us.

Many thanks in advance.

 

[steaky]

Usually, you can get the PR card within 3 months after you landed in Canada. And suppose you were a tax resident after landing:
1) yes, your rental income monthly transfer to your account in Canada is taxable;
2) yes, money from sales of this rental property is taxable, regardless one time or multiple times or not transferred to your account in Canada;

People are considered tax resident if they have a home in Canada, has spouse & child in Canada, etc. For details on the definition, you can read the www.cra.gc.ca website details. Tax resident can be before or after PR card or citizenship.

 

[littlekyle]

Thanks Steaky,

My wife and children will land with me but at the 1st stage - about 1 year after landing and we will rent a house or apart in spite of buying a house. So, do I consider as "tax resident"?

Kind regards,

 

[AllisonVSC]

Usually, you can get the PR card within 3 months after you landed in Canada. And suppose you were a tax resident after landing:
1) yes, your rental income monthly transfer to your account in Canada is taxable;
2) yes, money from sales of this rental property is taxable, regardless one time or multiple times or not transferred to your account in Canada;

People are considered tax resident if they have a home in Canada, has spouse & child in Canada, etc. For details on the definition, you can read the www.cra.gc.ca website details. Tax resident can be before or after PR card or citizenship.

Just a clarifying question, Steaky...wouldn't that rental income and any gains from selling the property being taxable in the US and therefore not subject to tax in Canada?

Btw, I did this in 2010 (rental income and sale... I took a loss on the sale) with the help of a cross border accountant and I did not pay any CAN tax even though I was a resident here.

 

[Alabaman]

Btw, I did this in 2010 (rental income and sale... I took a loss on the sale) with the help of a cross border accountant and I did not pay any CAN tax even though I was a resident here.

You probably did not pay any taxes because you took a loss

 

[steaky]

Thanks Steaky,

My wife and children will land with me but at the 1st stage - about 1 year after landing and we will rent a house or apart in spite of buying a house. So, do I consider as "tax resident"?

Kind regards,

If you and/or wife/children maintains a home in Canada, regardless own or rent, you are probably a tax resident. I said probably because there are cases where the husband lives in home country while wife lives in Canada, but still consider as non resident of Canada.

If your home country has a tax treaty (such as US) with Canada, the rental income and any gains from selling the property being taxable in US and therefore you might end up not subject to tax in Canada. If this is your case, I would consult an accountant with inter country tax filing experience.

 

[littlekyle]

Hi Steaky,

My family - spouses & children from Asia, not US - will move to Canada together and we have to rent a house or apart, of course. Further to your instruction, we are considered as tax resident and the income from home country including rental or sales of property is subject to CAN taxation. It's quite painful as we don't think to get easily a job at the beginning period, say 6-12 months, in Canada. ... headache, isn't it?

Any way, thank you very much for your advice Steaky.

Rgds,

 

[PMM]

Hi

Hi Steaky,

My family - spouses & children from Asia, not US - will move to Canada together and we have to rent a house or apart, of course. Further to your instruction, we are considered as tax resident and the income from home country including rental or sales of property is subject to CAN taxation. It's quite painful as we don't think to get easily a job at the beginning period, say 6-12 months, in Canada. ... headache, isn't it?

Any way, thank you very much for your advice Steaky.

Rgds,

1. The rental from your properties overseas has to be reported as income, but you can claim expenses for maintaining that property, mortgage interest see an international tax preparer.
2. Only the increase in value from the date of "landing" to the date the property is sold is reported as capital gains tax on your tax report.
3. If your country has a tax treaty with Canada, there won't be double taxation.

 

[steaky]

Hi

2. Only the increase in value from the date of "landing" to the date the property is sold is reported as capital gains tax on your tax report.

If there's a decrease in value from the date of landing to the date the property is sold is reported as capital loss on your tax report. You can offset any capital gains in the future.

 

[littlekyle]

Thank a lot PMM and Steaky.

 

[gfo]

Hi! My mom has landed here in 2020. She has sold her primary residence this year and my siblings and I are part owners of the property.
How much can she funds can she transfer to Canada legally? Is she limited to her share of the total selling price which is 60%? Can she use our joint account to transfer the funds overseas or her own account?
Thanks!

 

[YVR123]

Hi! My mom has landed here in 2020. She has sold her primary residence this year and my siblings and I are part owners of the property.
How much can she funds can she transfer to Canada legally? Is she limited to her share of the total selling price which is 60%? Can she use our joint account to transfer the funds overseas or her own account?
Thanks!

She can transfer all of it. Better to use her own account. Or Joint account that includes herself (not sure what "our Joint account" implied).

If she is a tax resident, you need to report the capital gain of the sale. And captial gain is taxable. (regardless if she transfer the money to Canada or not)

 

[gfo]

Thanks for the reply @YVR123!