Hello, I'm planning on landing before Xmas and returning to sell the rest of my possessions and finish the statutory notice I have to give before leaving my job. My question is, during the landing process do customs record a total value of funds you currently have at that moment for tax purposes? I will have worked for another 4 months when I move back out for good. Will my extra savings and money gained from selling possessions be liable for tax in Canada ?

My reason for landing sooner is just because I can set up a bank account and apply for other things which take time and once I return I will be ready to start work. Also I dont want to leave it too close to my visa expire date and risk losing it all.

Regards

Matt

No, they dont record your total worldwide net worth...I think that is what you are asking.

They might ask how much money you have to live off but if you are not taking up residency straight away they might not ask you this. Also the question is also to do with minimum funds you are expected to have (as per the visa application requirements).

In the case you have described the funds from a house sale might be taxable, but I think it is the difference between the house value when you took up residency and when you sold it. I am sure someone else can answer that with more authority.

I say "take up residency" as that is the term for tax purposes.

JB

I know I have to provide proof of funds to satisfy the minimum limit. I'm also aware of the capital gains involved with exchange rates. It just confuses me how they are able to know if you make a capital gain or not when they don't know if you have more money than what you started with.

You are not liable for Canadian tax on gains / income until you become a tax resident in Canada. This is not when you land, but when you start living in Canada. So this will be when you return to Canada to live, not when you land on a prior visit.

I see, well that makes sense. I'm assuming immigration wont ask for my goods accompanying/GTF lists (I will still have them just incase). Then when I return I have to tell them im staying?

Also I thought we became a tax resident on the day of landing, regardless if you leave afterwards.

On the GTF, it all depends on the customs person you get. Ideally you should only declare GTF when you take up residence. Tax is based on establishing residency ties here, hence landing and going back is not residency.

Residential ties include:

a home in Canada;
a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) and dependants who move to Canada to live with you;
personal property, such as a car or furniture; and
social ties in Canada.

Other ties that may be relevant include:

a Canadian driver's licence;
Canadian bank accounts or credit cards;
health insurance with a Canadian province or territory.

(tax from http://www.cra-arc.gc.ca/tx/nnrsdnts...nwcmr-eng.html)

When we landed we stayed a week, then returned 6 months later to live.

On landing, they just wanted to know that we would be taking everything we had with us out of the country again - I guess this could vary by who you get, though. When we arrived for good we gave them our detailed goods to follow list.

We had an accountant do our taxes the first year. To establish when we became tax resident he didn't even use the date we arrived to stay. He wanted to know the dates we applied for drivers licenses and provincial healthcare, and the date we enrolled our children in school. I guess those events show a clear intent to stay.

I see, nothing for me to really worry about then. What if I don't have any "goods to follow"?

If you have no goods to follow then just say that when they ask.

The point of the goods to follow list is that anything you import once you are resident in Canada is subject to tax (duty). There is an exemption for personal possessions you own when you immigrate, so you can bring them in without charge, which includes carrying them in or receiving a shipment after your arrival.

You are correct about income but the exchange rate is fixed on the date that you land. Any money you bring in at a later date will be liable to a capital gain or a capital loss depending if the exchange rate moves in your favour or not. This needs to be declared.

This is what I wanted to clarify. But i'm guessing this will be declared on the first tax return at the end of the year.

Actually, I think that's incorrect. If you have foreign currency (or any asset), the CAD value is fixed at the time you become tax resident in Canada, and not at the time you land.

As Alan said, this is incorrect. The value of assets for tax purposes is from the day you become a tax resident of Canada, not necessarily the same day as you take up landed status if you leave the country again. The prevailing BOC FX rate applies. BOC has a 10 year historical chart on the web site to look it up. CRA use the BOC rate in all their calculation.

Ok I am planning on opening a bank account during the landing and applying for ID's/driving licence etc.

I'm finding it a very grey area as to when someone becomes a tax resident. I'm assuming that I will become a tax resident once I am making an income while in Canada and/or having purchased a vehicle or renting accomodation. Not just opening a bank account and returning.

Opening a bank account, with an overseas address and having never lived in Canada should not be a problem. You won't be able to get a drivers license until you live here, not sure what 'IDs' you are referring to other than that. Determination of tax residency is 'ties to Canada', not when you start earning money.