Tax, FX rate question, FX charges question
Jan 15th 2017, 2:17 pm
#1
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Location: Toronto
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Tax, FX rate question, FX charges question
So, it's that time of year again... This time I have a new situation to account for on my taxes. I was left some money last year which I deposited in my UK bank account (it was a gift in pounds) and then transferred to Canada a couple of weeks later using Transferwise for which I paid a 0.5% fee. The FX rate had shifted enough to put me above the $200 exemption rate for gains due to FX. Two questions come out:
1. CRA says you can use the daily or annual FX rate when calculating foreign income. If I used the daily rate I'd have a gain of around $500 whereas the annual rate would of course give me a gain of 0 since the whole thing fell within the same year. I assume, in this case, the CRA would require me to use the daily rate. Does anyone know for sure?
2. Can I offset the 0.5% fee against the gain?
1. CRA says you can use the daily or annual FX rate when calculating foreign income. If I used the daily rate I'd have a gain of around $500 whereas the annual rate would of course give me a gain of 0 since the whole thing fell within the same year. I assume, in this case, the CRA would require me to use the daily rate. Does anyone know for sure?
2. Can I offset the 0.5% fee against the gain?
Jan 15th 2017, 3:41 pm
#2
Binned by Muderators
Joined: Jul 2007
Location: White Rock BC
Posts: 11,682
Re: Tax, FX rate question, FX charges question
So, it's that time of year again... This time I have a new situation to account for on my taxes. I was left some money last year which I deposited in my UK bank account (it was a gift in pounds) and then transferred to Canada a couple of weeks later using Transferwise for which I paid a 0.5% fee. The FX rate had shifted enough to put me above the $200 exemption rate for gains due to FX. Two questions come out:
1. CRA says you can use the daily or annual FX rate when calculating foreign income. If I used the daily rate I'd have a gain of around $500 whereas the annual rate would of course give me a gain of 0 since the whole thing fell within the same year. I assume, in this case, the CRA would require me to use the daily rate. Does anyone know for sure?
2. Can I offset the 0.5% fee against the gain?
1. CRA says you can use the daily or annual FX rate when calculating foreign income. If I used the daily rate I'd have a gain of around $500 whereas the annual rate would of course give me a gain of 0 since the whole thing fell within the same year. I assume, in this case, the CRA would require me to use the daily rate. Does anyone know for sure?
2. Can I offset the 0.5% fee against the gain?
2. Yes.
Jan 15th 2017, 3:51 pm
#3
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