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Old Oct 3rd 2017, 5:09 pm   #1
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Default Question about tax resident

Hello

Are there any tax implications when moving GBP from England to Canada? I moved to Canada from England in January 2013 and got my PR in May 2016. The money was sitting in my UK bank and I moved it over to Canada in September 2016 (without converting it to CAD). I received a form from my UK bank yesterday asking for my social security number and some other info to determine where I am a tax resident and it made me think about the money I moved.

I'm not sure at what point I became a tax resident of Canada so any other info on that and possible implications would be greatly appreciated.

Thanks
LB
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Old Oct 3rd 2017, 5:26 pm   #2
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Default Re: Question about tax resident

Hi

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Originally Posted by Littlebunny View Post
Hello

Are there any tax implications when moving GBP from England to Canada? I moved to Canada from England in January 2013 and got my PR in May 2016. The money was sitting in my UK bank and I moved it over to Canada in September 2016 (without converting it to CAD). I received a form from my UK bank yesterday asking for my social security number and some other info to determine where I am a tax resident and it made me think about the money I moved.

I'm not sure at what point I became a tax resident of Canada so any other info on that and possible implications would be greatly appreciated.

Thanks
LB
1. There are no taxes on funds transferred to Canada.
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Old Oct 3rd 2017, 5:55 pm   #3
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Default Re: Question about tax resident

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Originally Posted by Pulaski View Post
Generally, you pay tax on income earned on bank deposits where you live. You should have continued to pay tax in the UK on interest earned after moving your money to Canada.

Your liability for tax in the UK on the interest earned (even though the money was already in Canada) ended when you left the UK to live in Canada.

As PMM said, the act of transferring the money to Canada had no tax consequences.
Not necessarily true. There could be CGT consequences.
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Old Oct 3rd 2017, 6:40 pm   #4
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Default Re: Question about tax resident

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How so? Moving money from one bank account to another bank account can't generate a capital gain (though it might if you reversed it), so where does move a sum of money in one direction create a CGT issue?
Depending on the amount, may required a T1135 when it was in the UK. If funds are held in GBP to GBP and still tax resident of Canada, no CGT. If leaving Canada permanently CGT on deemed disposition. Other than that, CGT could become due on final FX to CAD, depends on difference between FX rate on acquisition/becoming tax resident and rate on final exchange.

Likelihood is the OP was tax resident from 2013. If the amount is over $100,000 CAD, likely not a problem so long as a T1135 was filed with the filers T1.
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Old Oct 3rd 2017, 6:43 pm   #5
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Default Re: Question about tax resident

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Originally Posted by Pulaski View Post
How so? Moving money from one bank account to another bank account can't generate a capital gain (though it might if you reversed it), so where does move a sum of money in one direction create a CGT issue?
I believe it would apply on the difference in value (in Canadian Dollars) at the time of becoming a tax resident, and the value (in Canadian Dollars) at the time of transfer.

For example, if the OP became a PR and resident for tax purposes and had money in the bank at that time at an exchange rate of $1.55 to the £1 (all assets are deemed disposed of at the time of becoming a tax resident, hence their valuation) - and then transferred the money over when the exchange rate was at $1.85 to the £1 - then potentially there could be a capital gain.

I may be incorrect but that is my understanding.

How foreign exchange impacts capital gains | Advisor.ca

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Old Oct 3rd 2017, 6:49 pm   #6
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Default Re: Question about tax resident

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Originally Posted by Siouxie View Post
I believe it would apply on the difference in value (in Canadian Dollars) at the time of becoming a tax resident, and the value (in Canadian Dollars) at the time of transfer.

For example, if the OP became a PR and resident for tax purposes and had money in the bank at that time at an exchange rate of $1.55 to the £1 (all assets are deemed disposed of at the time of becoming a tax resident, hence their valuation) - and then transferred the money over when the exchange rate was at $1.85 to the £1 - then potentially there could be a capital gain. ....
OK, that makes sense.
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Old Oct 3rd 2017, 8:40 pm   #7
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Default Re: Question about tax resident

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Originally Posted by Siouxie View Post
I believe it would apply on the difference in value (in Canadian Dollars) at the time of becoming a tax resident, and the value (in Canadian Dollars) at the time of transfer.

Not quite.

If the currency was held in GBP in the UK then transferred to Canada, the gain would only be taxable when the FX was made, which could be years later. Deemed acquisition value is the prevailing BOC rate on day of becoming a tax resident.

No different to stocks or any other investment. Value in CAD at time of becoming a tax resident, taxed at time of sale.

If valuation was made and taxed when funds were transferred, but held in GBP after transfer, there would be another round of tax when funds were converted to CAD, if there was a currency gain, which does not happen.
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Old Oct 4th 2017, 4:01 pm   #8
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Default Re: Question about tax resident

On a slightly different slant.
We have also been getting these letters for ourselves and kids.
They do ask for our SIN number which I had thought should not be given out and on the initial way of letters I sent back, I refused to divulge ( I don't like letters flying across the ocean with so much info on them)

Have others been divulging their SINs?
I have more letters to send back but wondered what others do as I suspect many of us are receiving them.
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Old Oct 4th 2017, 4:08 pm   #9
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Default Re: Question about tax resident

Quote:
Originally Posted by snoopdawg View Post
On a slightly different slant.
We have also been getting these letters for ourselves and kids.
They do ask for our SIN number which I had thought should not be given out and on the initial way of letters I sent back, I refused to divulge ( I don't like letters flying across the ocean with so much info on them)

Have others been divulging their SINs?
I have more letters to send back but wondered what others do as I suspect many of us are receiving them.
SIN has to be given to any organisation reporting to the govt. such as banks, employers and govt departments. Others may ask, but they won't get it from me. UK banks are now asking where we are tax resident and for a SIN, in all likelihood this will result in more information sharing between HRMC and CRA.

Although I have nothing to hide or any significant assets outside of Canada, our privacy is being compromised day in and day out. Equifax hold so much data on most of us and they managed to lose a chunk of it. Thankfully credit bureaus don't have my SIN.

Most children would not have a SIN until they start work anyway. We applied for our kids SIN when they were 16.
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Old Oct 4th 2017, 4:12 pm   #10
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Default Re: Question about tax resident

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Most children would not have a SIN until they start work anyway. We applied for our kids SIN when they were 16.
Our children applied for their SINs when we applied for ours when we first arrived.

IIRC, they were required when we set up RESPs for them.
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Old Oct 4th 2017, 5:22 pm   #11
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Default Re: Question about tax resident

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SIN has to be given to any organisation reporting to the govt. such as banks, employers and govt departments. Others may ask, but they won't get it from me. UK banks are now asking where we are tax resident and for a SIN, in all likelihood this will result in more information sharing between HRMC and CRA.

Although I have nothing to hide or any significant assets outside of Canada, our privacy is being compromised day in and day out. Equifax hold so much data on most of us and they managed to lose a chunk of it. Thankfully credit bureaus don't have my SIN.

Most children would not have a SIN until they start work anyway. We applied for our kids SIN when they were 16.
I have no issues providing SINs to Canadian financial institutions , my issue is the UK- especially in a letter which is not secure.
Did you give your SIN to UK banks?
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Old Oct 4th 2017, 5:32 pm   #12
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Default Re: Question about tax resident

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I have no issues providing SINs to Canadian financial institutions , my issue is the UK- especially in a letter which is not secure.
Did you give your SIN to UK banks?
No
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Old Oct 4th 2017, 5:40 pm   #13
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Default Re: Question about tax resident

Excellent
Nor have I and I'll continue to do the same. I just wondered what others were doing or if I would stand out.
I suspect it may cause an issue or two but I'll deal with it when it happens and I've nothing to hide
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Old Oct 4th 2017, 5:45 pm   #14
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Default Re: Question about tax resident

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Excellent
Nor have I and I'll continue to do the same. I just wondered what others were doing or if I would stand out.
I suspect it may cause an issue or two but I'll deal with it when it happens and I've nothing to hide
I have next to nothing there and find NatWest to be more of a pain in the arse than it is worth.
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Old Oct 5th 2017, 12:07 am   #15
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Default Re: Question about tax resident

Just as a matter of interest ................ if you open a bank account in a child's name, that child has to have a SIN number, even a new-born.

We discovered that when we sent a cheque to the mother of our first-born niece to open a bank account in her name, with the idea that it could become a means of saving for her from the very beginning. It was about 2 months before the cheque could be deposited.


All the Canadian children in our family now have their SINs ready for when they start work, as well as having savings accounts
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