- This includes houses, bank accounts, investments, savings and any other property.
- If an immigrant from the UK purchased a house in 1980 in Britain for £25,000 and still owned it when they left the UK in 2006 and it had a market value of £200,000 and the exchange rate was then 2.2, then $440,000 is the tax cost and the amount to report.
- Note that you do not need to report foreign assets for the year you become tax resident in Canada. However, you still must report any income earned on these assets from the date you become tax resident.
The day you become tax resident in Canada (see http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html) is the base date for the valuation of any foreign assets you hold. Assets such as foreign real estate, bank deposits, and securities are valued at their fair market value on that day and this is converted into Canadian dollars using the then current exchange rate. Historic exchange rates can be found on the Bank of Canada website http://www.bank-banque-canada.ca/en/rates/exchform.html. This has nothing to do with the actual cost to you. It is a reflection of the value as if you had disposed of, and repurchased, the assets immediately prior to landing. This is your "tax cost" of the asset in Canada. Keep documentary records to prove the asset’s valuations as these may be needed for reporting purposes, or if the Canada Revenue Agency (CRA) asks to see them. If you hold foreign property with a combined tax cost of $100,000 or more at any time during a year this has to be reported on your tax returns for all the years you own it. Check the box on page one of your tax return and complete and file a form T1135.
6 Comments
Lucy
7/4/2013 03:26:59 pm
If the foreign property is used for personal use, why is it capital gains when it is sold? The property was never used for profit purposes.
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11/7/2013 07:17:46 pm
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9/2/2014 05:04:04 pm
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A great informative post you shared on this page about calculating the tax returns of a successful business easily by using online system softwares , I read this post and remember the best points especially " customer service management " mentioned in this article which help me for running a business successfully with the help of professional accounting .If you want to start a business successfully then you must read this article carefully and keep it in your mind all the best points of a great article which help you to running a business successfully with the professional accountant .
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11/18/2020 08:21:26 am
Canadian tax purposes even though it is a gain in pounds sterling. You do not need to report the value of foreign registered personal or occupational pension funds if at least part of the contributions into these funds have been made by an employer. Independent Savings Accounts are not covered by this exemption and are reportable. Other pension funds that consist entirely of contributions by an individual, such as Self-Invested Pension Plans may also be reportable and professional advice is recommended.
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