Investing more than $100,

Hi Mr. Ingram:
I have been receiving your daily emails once having visited Fred
Snyder in
Vancouver and was going to stop them because there is so much and
I am
dealing with to much work stuff.
But now I have a great three part question.  It arose when I
approached a
person with a private placement investment for $100,000.00.
1.  Please simply explain the Canadian governments Foreign
    Entity Rules?
2.  What impact are they going to have on investing?
3.  Do you think they will ever become policy?
yours with appreciation.
 XX XXXXXX currently in Calgary
david ingram replies;
happy to answer - Fred Snyder has provided me with an important
forum by having me as a regular guest on his radio show for the
past year.
1.    Simply put Canada requires you to report the existence of
$100,000 or more invested outside of Canada.  The $100,000 can be
any combination of real estate and stock or stocks and bonds or
oil and gas LLP's or a charter boat in the Caribbean or a rented
jet engine on an American Airlines jet, its existence AND any
income earned must be reported on form T1135 which is a VERY
simple form to fill out.  You can find the form at:
Please note that it is very easy to fill out and there are large
penalties for failure to file it.
Note as well that it does NOT apply to a vacation home.  You can
have a $2,000,000 waterfront condo at Key Biscayne and another
$3,000,000 place in Waikiki and as long as they are for personal
use only, there is no requirement to report their existence.
I have seen no evidence of the form or the reporting rules having
any effect whatsoever on long time Canadians'  in vesting out of
the country,
I am positive, however, that it had a major affect on driving
hundreds, if not thousands of new immigrants out of the country
when the rules came in in 1996.
2.    I personally had 38 former Hong Kong residents give up
their Canadian homes and return to Hong Kong when the new rules
came into effect.
3.    It is already policy and is going into its 10th year.
HORRORS - After answering the above, it dawned on my that you
were talking about the rather convoluted rules which were
proposed in OCT, 2003 AND SO FAR AS I KNOW PASSED, effective on
Jan 1, 2003. These rules were aimed at taxing passive income
buried within a two or three layered investment. In my opinion,
the old rule described above already covered these situations but
many individuals "smarter than I" had come up with convoluted
schemes to seemingly avoid Canadian Tax on some offshore
In the interest of time, I am going to refer you to two learned
writings on the subject:   The first 12 page treatise is by
Morrie Hotter of Borden Ladner Gervais and can be found at:
The second is a 4 page KPMG document which includes a
questionnaire which will help you decide whether the rules apply
to "your" propped investment and can b e found at:'
My personal rule is that off shore trusts and offshore
investments proposed with tax breaks are the most dangerous
investment any one can make.
Without exposing any particular individual, I have run into
Canadian Senators, Canadian MP's, Provincial MLA's and a host of
businessmen and women who have collectively told me of losing
over $10,000,000 dealing with people like Hoffman, Scott Brown
and Nick Massee who have all disappeared with millions of other
people's money although Hoffman was caught in Tasmania last year
and the London, Ontario's Albert Walker was caught and convicted
of murder in England and has now been returned to Canada.
Remember, that when someone sets it up as a "secret" account to
keep it from the taxman, it is not uncommon for that person to
run away with your "secret" money.
That happened to a Winnipeg Sporting Goods store owner who went
to Switzerland with his Winnipeg Chartered Accountant to open up
a secret account and when he went back, the accountant had
disappeared and the money was gone for ever bankrupting the
sporting goods store owner in the long run..
And for those of you who have forgotten, Vancouver's own Jerome
Schneider has recently been released from an American jail after
pleading guilty in the USA to setting up similar schemes for over
1,000 Americans to avoid US tax.  I first exposed the Schneider
deals back in 1996.  You can find out more on this by going to:
Remember that Schneider set up over 1,000 people over 12 years
before being convicted.  As part of his plea bargain, he turned
in over 1,000 clients and the lawyers and accountants who had
assisted him.  Under his scheme, every client was liable for
fines of up to $500,000 PLUS 5 years in jail for failing to
report the "existence" of the offshore accounts and Schneider
told them NOT to report them.
My suggestion is that you deal with conventional issues and look
for a good return and pay whatever tax is due.
The second by
-------------- next part --------------
An HTML attachment was scrubbed...


Trackback URL for this entry:

No trackback comments for this entry.