My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions Subject: repatriation of offshore funds when moving back to Canada Expert: taxman at centa.com Date: Tuesday September 07, 2004 Time: 08:03 PM -0700 QUESTION: I need to know what the tax consequences are of someone who owns offshore tax free investments bringing them back home to Canada when they are still paying into the plan, and also for those whose plans are paid up and are still growing within the plan - how are these taxed? Is there a way to avoid the tax? ----------------------------------------------------------------------------------- david ingram replies: There are two ways to read this question: 1. you were living in Canada and bought some supposedly tax free offshore investments - or 2. you were legitimately living offshore and are now returning to Canada with your investments. I have tried to answer both: 1. I am not sure what you have that is a legitimate offshore tax free investment under Canadian Law. The only thing I can think of is a financial instrument which you have bought offshore and it has increased in value as a capital gain and is tax free because it has not sold. Some of the Swiss investments have had this characteristic but others have gone down in value rather than up. In this case, it is tax free until sold no matter where it is. You mention still "putting into the plan" and "growing within the plan". If the growth is interest or dividends, the growth is taxable on an annual basis under Canadian Law even if you do not redeem or cash in the growth. I would need more information but think you may have been ignoring an item which is really taxable on an annual basis. You should check it with someone that knows income tax and not just with whomever sold it to you. In addition, if you have over $100,000 Canadian invested out of the country, there are now severe Canadian penalties for not reporting the investment on Canadian Form T1135 which asks how much, how invested and in what general area of the world the funds are invested. This is form T1135: http://www.cra-arc.gc.ca/E/pbg/tf/t1135/t1135-99e.pdf OR - 2. You have been living out of the country and have investments which have grown in value. If you are returning to live in Canada now or coming for the first time, any assets you own are valued at their worth as you enter Canada. So if you have a Grand Cayman Islands account that started at $50,000 and is now worth $100,000 as you enter Canada, the value for future gains is based upon the difference between it's value when you entered the Country and when you sell it or cash it in with the exception that if it is earning a return while you live here, you have to report any accumulated accrued interest in the year it is accrued. I know this is not much help but hopefully you will get something from it. ================================== Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. Old shows are archived at the site. Answers to this and other similar questions can be obtained free on Air every Sunday morning. Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier Partners and I will be hosting an INFOMERCIAL but LIVE talk show called "ITS YOUR MONEY" Those outside of the Lower Mainland will be able to listen on the internet at www.600AM.com Local phone calls to (604) 280-0600 - Long distance calls to 1-866-778-0600. Old shows are archived at the site. This from ask an income tax immigration planning and bankruptcy expert consultant guru or preparer from www.centa.com or www.jurock.com or www.featureweb.com. Canadian David Ingram deals daily with tax returns dealing with expatriate: multi jurisdictional cross and trans border expatriate gambling refunds for the United States, Canada Mexico Great Britain the United Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, Indonesia, Egypt, Antarctica, 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, American and Canadian and Mexican and any of the 43 states with state tax returns, etc. income tax wizard wizzard guru advisor advisors experts specialist specialists consultants taxmen taxman tax woman planner planning preparer of Alaska, Alabama, Arkansas, Arizona, California Denver Colorado, Connecticut, Delaware District of Columbia Miami Florida, Garland Georgia, Honolulu Hawaii, Idaho, Illinois, Indiana Des Moines Iowa Kansas Kentucky, Louisiana Bangor Maine Maryland Boston, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico,New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon. Paris, Rome, Sydney, Australia Hilton Pennsylvania, Rhode Island, Rockwall, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, West Virginia, Wisconsin, Wyoming, British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec City, New Brunswick, Prince Edward Island, Nova Scotia, Newfoundland, Yukon and Northwest and Nunavit Territories, Mount Vernon, Eumenclaw, Coos Bay and Dallas Houston Rockwall Garland Texas Taxman and Tax Guru and wizzard wizard - -------------- next part -------------- An HTML attachment was scrubbed... URL: http://www.centa.com/CEN-TAPEDE/centapede/attachments/20040913/fa56bb30/attachment.htm
Comments (0)
CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/UsCaWeekofMon20040913001315.html