Hi,
I have read and listened to David Ingram on the radio and internet. So now I am writing with a few questions, as I am confident that you are the expert in this field. I have been very impressed by your skills and professinalism as well as attitude.
I am a xxxxxxxxx citizen, temporary resident in Canada. I work in xxxxxxxxxxxxx for the xxxxxxxx Ministry of Defence. I work in an international setup with DND Canada, training a mix of international student military pilots at xxxxxxxxxxxxx. I have been here on a 'Visiting Forces Act' Visa for 3 years. I have just been extended in my job for at least another 3 years. I have a xxxxxxxx wife and 1 xxxxxxxxxxxxxxxxx child and 2 canadian kids (1 and 2½ years).
I have just aquired a temporary SIN number.
My considerations are that we might decide to stay in Canada to raise our kids, after my contract ends, if we can.
I pay tax from my pay check to the xxxxxxxxxxxx government. I have extensive experience with investing in equity and bonds from xxxxxxxxxxxx.
Now, I have come to a point (after many years of thoughts and talk) where I want to invest for the future on a more professional level, for the benefit of my family.
My first question to you is:
How do I make investing the most profitable in relation to tax ? I assume that I will pay canadian tax of the money I invest here in Canada. At least I think that would be more desireable for me J .
a.. I have a friend (another xxxxxxxxxxxxdane working in xxxxxxxxxxxx in a similar situation) who I talked about making the investment company together. The advantages would be that you have something together and can encourage each other vice doing everything yourself. Some advice would be appreciated.
In xxxxxxxxxxxxxxxxx I know how to setup an investment company for my self, enabling to limit risks and to be compensated for office supplies and other expenses. I don't know how that works in Canada. Therefore I also don't know if it is an advantage to invest as a 'private person' or as a 'company' in some form. It is gonna be a part time 'job' for me as I will still keep my job as a flight instructor with the military. I have previously attempted to make a xxxxxxxxxx company, but due to me livng in Canada they wouldn't allow me to do that. Generally in xxxxxxxxxxxx you pay 40 % in tax on the profit you make on capital (stocks) gain, while a company pays up to 30 %.
If I succeed in setting up an investment company or arrive with a good plan for making investments on my own after your advice I anticipate an ongoing business relationship.
My pay check from the xxxxxxxxxxx government is app 220.000 can$/year. I pay tax on most of it, up to 60 %. I have some funds (cash) available for investments and my long term goal is to be able to live of off those investments in hopefully 5-8 years. I am 48 years old.
I hope I have provided enough information to get us started and I hope that you would ask for more information to be able to give the best advice and information back to me.
In much anticipation,
All the best and thanks for your nice program on the radio.
-------------------------------------------------
david ingram replies:
As an employee of a foreign govermnment, you are exempt fropm tax under Article XIX of the Canada Denmark Income Tax Treaty.
There is an exception which would have you taxable in Canada if it was determined that you were working for a 'business' set up by the danish government.
If you and your friend were to set up a Canadian company to make investments, the tax on a non-resident foreign owned holding company is about the highest you can pay in Canada.
In general, I would not recommend that you have a holding comapny
If you own shares or investments in your own name, any profits would be taxable in Denmark which would give you a foreign tax credit for the taxes you woul dhave to pay first to Canada.
Interest would be taxable first in Canad at 10% under artuicle XI of the Treaty
Dividends would be taxable at 15% under article X of the Treaty unless you own more than 25% of the shares in which case Canada would tax 50% of the profit (see Article XIII.)
You should have received a 'too many to answer reply before'
In reality, your question is too specific to apply to many people and I would usually only deal with it on a paid consultation basis.
It is very unlikely that blind or unexpected email to me will be answered. I receive anywhere from 100 to 700 unsolicited emails a day and usually answer anywhere from 2 to 20 if they are not from existing clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject and get answered first. I also refuse to be a slave to email and do not look at it every day and have never ever looked at it when i am out of town. expert US Canada Canadian American Mexican Income Tax help
However, I regularly search for the words"PAYING CUSTOMER" and always answer them first if they did not get spammed out. As an example, as I write this on Sept 2, 2007 (the day before I turn 65), since June 16th (78 days), my 'spammed out' box has 24,417 unread messages, my deleted box has 8063 I have actually looked at and deleted and I answerd 576 email questions for clients and strangers. I have also put aside 472 messages that I am maybe going to try and answer because they look interesting. -expert US Canada Canadian American Mexican Income Tax help
Therefore, if an email is not answered in 24 to 36 hours, it is lost in space. You can try and resend it but if important, you will have to phone to make an appointment. Gillian Bryan generally accepts appointment requests for me between 10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los Angeles) time at (604) 980-0321. expert US Canada Canadian American Mexican Income Tax help.
David Ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
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My Home office is at:
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Cell (604) 657-8451 -
(604) 980-0321 Fax (604) 980-0325
Calls welcomed from 10 AM to 9 PM 7 days a week Vancouver (LA) time - (please do not fax or phone outside of those hours as this is a home office) expert US Canada Canadian American Mexican Income Tax help.
email to taxman at centa.com
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Disclaimer: This question has been answered without detailed information or consultation and is to be regarded only as general comment. Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included." expert US Canada Canadian American Mexican Income Tax help.
David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. expert US Canada Canadian American Mexican Income Tax help.
This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no rental
$1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits no move in or out
$1,600 would be for two people with income from two countries
$2,800 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely $450
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales) are likely $50.00 for the first and $20.00 each after that.
Just a guideline not etched in stone.
This from "ask an income trusts tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax Immigration Wizard Antarctica Rwanda Guru Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention. expert US Canada Canadian American Mexican Income Tax help.
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