chiefmissile

Hi,

I was wondering if CRA could, in an audit situation, ask you to provide UK and other foreign bank/credit card account statements?

If they can ask and you don't supply these what are their powers, its not as if they can freeze your foreign account?

I am guessing that in an audit situation they would only ask for expenditure receipts as there are so many legalities concerning enforcement of showing foreign account statements?

Regards

Andrew

JonboyE

Yes.

It is your responsibility to keep all necessary records to support your tax returns. One thing they can do if they think a taxpayer is being uncooperative is to assess a large amount of tax and say, "OK, if you think we are wrong then prove it."

ExKiwilass

don't screw with the CRA OP. it's not worth it.

xxdb

Bottom line is they could ask you for absolutely anything. I wouldn't take the piss though. If you do they could just assess you and it would be up to you to disprove it and if you couldn't pay then your only recourse would be to declare bankruptcy. But stay clean: Rev Can are actually much better to deal with than the Revenue back home.

Almost Canadian

I see things like this written all the time and it is, of course, nonsense.

Federal Court would have little issue with kicking CRA's arse for using such a method. The burden of proof lies with them, not with the taxpayer.

Simon Legree

CRA is very fond of Brits who fail to declare such things as rental income and State Pensions. An acquaintance of mine was nailed big time for failing to declare both and they will be on his case for evermore. They are well aware that most British immigrants will receive State Pensions and they watch for them. Even if the funds are left in the UK they still have to be declared.

xxdb

Rental income you likely should declare. I'm of the MORAL opinion that a pension shouldn't be taxed but given that this is the rule then obviously you're skating on thin ice if you don't declare it.

I personally plan not to be in Canada when it's retirement time because though Rev Can seems to be fairer than the Inland Revenue for most things I think the way pensions are treated is a ****ing joke. And yes I did deliberately swear there. And no I won't get into an argument with sycophants by explaining why I think that.

Almost Canadian

Income is income, is it not? For the purposes being discussed, why does the source of the income matter?

Pizzawheel

So you're OK until the date you retire and become eligible for a pension? I have some pittance of a state pension but not planning to retire... I'll watch out for this!

JonboyE

a) Section 230 of the Income Tax Act

b) “The income tax system is based on self monitoring. As a public policy matter the burden of proof of deductions and claims properly rests with the taxpayer. The Tax Court judge held that persons such as the appellant must maintain and have available detailed information and documentation in support of the claims they make. We agree with that finding... the taxpayer is responsible for documenting her own personal affairs in a reasonable manner. Self written receipts and assertion without proof are not sufficient”: Njenga, Njenga v. R., 1996 CarswellNat 1559, 96 D.T.C. 6593, [1997] 2 C.T.C. 8 (Federal Court of Appeal)

c) Happens all the time - every day. And if you continue not to cooperate they will drain your bank account(s).

Edited to add:
238.
(1) Offences and punishment -- Every person who ... has failed to comply with any of sections 230 ... is guilty of an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to
(a) a fine of not less than $1,000 and not more than $25,000; or
(b) both the fine described in paragraph (a) and imprisonment for a term not exceeding 12 months.

Steve_

The entire purpose of the CRA seems to me to go after people who have stuff abroad, look at all the endless fiddling they do with T1135.

Another thing they love to do is deem you resident if you move abroad and don't file a proper last tax return with a deemed disposition payment.

Anyway, just posting to point out that the CRA has access to tax records under the treaty, so they can with a bit of minor effort see your tax records in the UK. Income tax is withheld on UK interest-bearing accounts, so HMRC has that information - so that means the CRA has it too if they want. Hence the reason you should file an R105 with any UK banks you deal with, to stop the withholding.

The days of being able to hide stuff abroad are rapidly coming to a close.

The burden of proof is on you, not them, so it's usually in your own interests to show them the information if a tax demand is based on it. Essentially you have to disprove what they're accusing you of.

Steve_

I think your lawyer-fu is failing you:

xxdb

In Britain a pension is not considered to be income and is not taxed. In Canada it is. Thus the differences in opinion.

JonboyE

Eh? https://www.gov.uk/tax-on-pension

xxdb

Ha Ha well I'm big enough to admit when I'm wrong. Touche sir.