Can CRA demand that you show them your UK bank account/Credit card statements
#31
Re: Can CRA demand that you show them your UK bank account/Credit card statements
To give an illustration of the whole proof thing, say the OP had an undeclared UK bank account. The CRA conduct an audit or get suspicious, based on something on schedule 3 or 4, T1135 or he gives his Canadian address to an FFI in the UK and the CRA get wind of it via HMRC.
So they look at your tax records in the UK via the provisions of the tax treaty, see you've got income tax withholding on UK accounts or the FFI has claimed income tax withholding exemption - either way, the CRA now know about the account. They make an assessment based on what information they have, e.g. say 5 years ago you had X amount of withholding, so mathematically they can work out the interest and thus the tax. After that you filed for an exemption, so they don't know that amount, so they send you a bill for the past six years based on what guesstimated info they have, with penalties and interest.
So from the standpoint of the law, theoretically the burden of proof is on them to prove that, but in reality the burden is on you, because if you don't pay the bill, they'll just deduct it from your refund or any credits you've claimed and you can't alter your payroll withholding. So you have to produce the statements from the FFI to prove it one way or the other.
I've not heard of this happening to anyone from the UK, but it's definitely happened to Canadians who have accounts in the US, usually because they put a Canadian address on the account and then don't declare the income. But the CRA can see the 1042-S or 1099 in question and assess tax - and they do.
So they look at your tax records in the UK via the provisions of the tax treaty, see you've got income tax withholding on UK accounts or the FFI has claimed income tax withholding exemption - either way, the CRA now know about the account. They make an assessment based on what information they have, e.g. say 5 years ago you had X amount of withholding, so mathematically they can work out the interest and thus the tax. After that you filed for an exemption, so they don't know that amount, so they send you a bill for the past six years based on what guesstimated info they have, with penalties and interest.
So from the standpoint of the law, theoretically the burden of proof is on them to prove that, but in reality the burden is on you, because if you don't pay the bill, they'll just deduct it from your refund or any credits you've claimed and you can't alter your payroll withholding. So you have to produce the statements from the FFI to prove it one way or the other.
I've not heard of this happening to anyone from the UK, but it's definitely happened to Canadians who have accounts in the US, usually because they put a Canadian address on the account and then don't declare the income. But the CRA can see the 1042-S or 1099 in question and assess tax - and they do.
#32
Re: Can CRA demand that you show them your UK bank account/Credit card statements
Trust me about bank accounts ( I don't know about credit cards ) they don't demand that you show them the account details, they simply GET them. You have no say in the matter. The first time you'll know that they've done it is when they contact you to say, ' What's all this then?' or words to that effect. I know, coz it happened to me. Thankfully I wasn't trying anything on, it was an error in the tax return, so believe me ( and other posters on here that have said the same thing..) Do not mess the CRA about bank accounts.
#33
Forum Regular
Joined: Dec 2011
Location: Edmonton, Alberta
Posts: 102
Re: Can CRA demand that you show them your UK bank account/Credit card statements
In Britain State Pension is considered to be income, and is taxable dependant on the amount of income of each individual and your personsl allowance, ie private pensions and the like. You are just responsible for paying your own tax as it is not taxed at source. The only things that are not taxable in Britain are benefits, ie pension credit/universal credit, income support, but any other income or earnings are.
Last edited by wiganfem; Jan 23rd 2015 at 2:07 pm.
#34
Andrew
Thread Starter
Joined: May 2012
Posts: 767
Re: Can CRA demand that you show them your UK bank account/Credit card statements
Trust me about bank accounts ( I don't know about credit cards ) they don't demand that you show them the account details, they simply GET them. You have no say in the matter. The first time you'll know that they've done it is when they contact you to say, ' What's all this then?' or words to that effect. I know, coz it happened to me. Thankfully I wasn't trying anything on, it was an error in the tax return, so believe me ( and other posters on here that have said the same thing..) Do not mess the CRA about bank accounts.