Money from selling home
Apr 13th 2019, 10:30 am
#1
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Thread Starter
Joined: Jul 2018
Location: Brighton, UK
Posts: 165
Money from selling home
Hi all
As we've put our house in the UK on the market - we are going to have a chunk of cash brought over to buy a new property.
Can anyone speak to the tax implications in Canada?
Has anyone sold a property before moving and then transferred the money to Canada? What did the process look like for you?
As we've put our house in the UK on the market - we are going to have a chunk of cash brought over to buy a new property.
Can anyone speak to the tax implications in Canada?
Has anyone sold a property before moving and then transferred the money to Canada? What did the process look like for you?
Apr 13th 2019, 11:22 am
#2
Forum Regular
Joined: Feb 2018
Posts: 66
Re: Money from selling home
I too am in this situation we have just sold our home and are about 5 weeks into the legal process with the solicitors. We too will have a large chunk of money for new home and stuff in Canada. i will keep my U.K. bank account open as we have a rental property here so will still need that but may leave house money in there and transfer it which if that’s the best way.
I remember when I moved to Canada with my parents about 14 years ago they took a bankers draft I think.
I remember when I moved to Canada with my parents about 14 years ago they took a bankers draft I think.
Apr 13th 2019, 11:42 am
#3
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Joined: Apr 2013
Location: London, ON
Posts: 2,485
Re: Money from selling home
Hi all
As we've put our house in the UK on the market - we are going to have a chunk of cash brought over to buy a new property.
Can anyone speak to the tax implications in Canada?
Has anyone sold a property before moving and then transferred the money to Canada? What did the process look like for you?
As we've put our house in the UK on the market - we are going to have a chunk of cash brought over to buy a new property.
Can anyone speak to the tax implications in Canada?
Has anyone sold a property before moving and then transferred the money to Canada? What did the process look like for you?
Transferring the proceeds across GBP50k at a time from our UK bank account to our Canadian one using Transferwise
Apr 13th 2019, 2:11 pm
#4
Assimilated Pauper
Joined: Mar 2005
Location: Ontario
Posts: 40,018
Re: Money from selling home
If it's just a pile of money then there are no tax implications but you should keep some documentation as to the source of the funds so that, if for example, you are charged with money laundering over an unrelated matter, you can keep the house proceeds out of that. If the house is being sold after you move then you need a valuation at the time of moving so as to establish a base line for capital gains tax.
Apr 16th 2019, 3:15 am
#5
Phaedrus by Plato (not5)
Joined: May 2017
Location: Vernon, BC
Posts: 206
Re: Money from selling home
I did this last year and can catagorically state that if it is your primary residence that you sell, and you sold it for the purposes of buying another primary residence (i.e. a house to live in) then there are no tax implications. If you have multiple properties it might be more complicated but if you can prove it was your primary residence where you lived I believe that too is ok.
Selling where you live to move house and buy another is not capital gains. Even if you made money on the it from the time you bought it to the time you sold it. It only matters if its an 'investment' property, not your home.
Selling where you live to move house and buy another is not capital gains. Even if you made money on the it from the time you bought it to the time you sold it. It only matters if its an 'investment' property, not your home.
Apr 16th 2019, 6:26 am
#6
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Joined: Apr 2009
Location: SW Ontario
Posts: 19,879
Re: Money from selling home
I did this last year and can catagorically state that if it is your primary residence that you sell, and you sold it for the purposes of buying another primary residence (i.e. a house to live in) then there are no tax implications. If you have multiple properties it might be more complicated but if you can prove it was your primary residence where you lived I believe that too is ok.
Selling where you live to move house and buy another is not capital gains. Even if you made money on the it from the time you bought it to the time you sold it. It only matters if its an 'investment' property, not your home.
Selling where you live to move house and buy another is not capital gains. Even if you made money on the it from the time you bought it to the time you sold it. It only matters if its an 'investment' property, not your home.
Ummm.. you might want to check that... that may apply to the UK, not necessarily in Canada!
For Canada tax purposes there is 'deemed disposition' when you become a Permanent Resident / Resident for tax purposes. So you are deemed to have sold your property overseas on the date that you become a PR in effect and repurchased it at fair market value - any gain in the value of the property between that date and when the property is actually sold - or the money transferred, as I understand it, can be liable for taxes.
Not to be confused with the zero Capital Gains Tax on selling a former family home and purchasing another - that's a different thing
https://www.canada.ca/en/revenue-age...2016.html#P111
https://wolterskluwer.ca/blog/moving...-consequences/
This might be of use: https://britishexpats.com/wiki/Tax_a...e_Sales-Canada
Canadian Tax
On the day you arrive as a new resident all your assets are deemed (the CRA loves this word) to be sold and repurchased at their fair market values. This means your old house back in the UK will be assumed to have a cost of whatever it could have been sold for in the open market on that day. If you subsequently sell it then you will have a Canadian capital gain or loss of the difference between the actual sale proceeds and the deemed cost on the date of your arrival.
Once you are tax resident in Canada you are taxable on your worldwide income. Any capital gain from the day you arrive in Canada to the day you sell the property, and any rental income on the UK property, is taxable in Canada.
On the day you arrive as a new resident all your assets are deemed (the CRA loves this word) to be sold and repurchased at their fair market values. This means your old house back in the UK will be assumed to have a cost of whatever it could have been sold for in the open market on that day. If you subsequently sell it then you will have a Canadian capital gain or loss of the difference between the actual sale proceeds and the deemed cost on the date of your arrival.
Once you are tax resident in Canada you are taxable on your worldwide income. Any capital gain from the day you arrive in Canada to the day you sell the property, and any rental income on the UK property, is taxable in Canada.
Last edited by Siouxie; Apr 16th 2019 at 6:32 am.
Apr 16th 2019, 7:02 am
#7
Phaedrus by Plato (not5)
Joined: May 2017
Location: Vernon, BC
Posts: 206
Re: Money from selling home
Ummm.. you might want to check that... that may apply to the UK, not necessarily in Canada!
For Canada tax purposes there is 'deemed disposition' when you become a Permanent Resident / Resident for tax purposes. So you are deemed to have sold your property overseas on the date that you become a PR in effect and repurchased it at fair market value - any gain in the value of the property between that date and when the property is actually sold - or the money transferred, as I understand it, can be liable for taxes.
Not to be confused with the zero Capital Gains Tax on selling a former family home and purchasing another - that's a different thing
https://www.canada.ca/en/revenue-age...2016.html#P111
https://wolterskluwer.ca/blog/moving...-consequences/
This might be of use: https://britishexpats.com/wiki/Tax_a...e_Sales-Canada
For Canada tax purposes there is 'deemed disposition' when you become a Permanent Resident / Resident for tax purposes. So you are deemed to have sold your property overseas on the date that you become a PR in effect and repurchased it at fair market value - any gain in the value of the property between that date and when the property is actually sold - or the money transferred, as I understand it, can be liable for taxes.
Not to be confused with the zero Capital Gains Tax on selling a former family home and purchasing another - that's a different thing
https://www.canada.ca/en/revenue-age...2016.html#P111
https://wolterskluwer.ca/blog/moving...-consequences/
This might be of use: https://britishexpats.com/wiki/Tax_a...e_Sales-Canada
Canadian Tax
On the day you arrive as a new resident all your assets are deemed (the CRA loves this word) to be sold and repurchased at their fair market values. This means your old house back in the UK will be assumed to have a cost of whatever it could have been sold for in the open market on that day. If you subsequently sell it then you will have a Canadian capital gain or loss of the difference between the actual sale proceeds and the deemed cost on the date of your arrival.
Once you are tax resident in Canada you are taxable on your worldwide income. Any capital gain from the day you arrive in Canada to the day you sell the property, and any rental income on the UK property, is taxable in Canada.
On the day you arrive as a new resident all your assets are deemed (the CRA loves this word) to be sold and repurchased at their fair market values. This means your old house back in the UK will be assumed to have a cost of whatever it could have been sold for in the open market on that day. If you subsequently sell it then you will have a Canadian capital gain or loss of the difference between the actual sale proceeds and the deemed cost on the date of your arrival.
Once you are tax resident in Canada you are taxable on your worldwide income. Any capital gain from the day you arrive in Canada to the day you sell the property, and any rental income on the UK property, is taxable in Canada.
Apr 16th 2019, 8:13 am
#8
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Apr 20th 2019, 11:48 am
#9
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Thread Starter
Joined: Jul 2018
Location: Brighton, UK
Posts: 165
Re: Money from selling home
Came to Canada as settler in Nov 2017, but only just managed to sell the UK house in Feb 2019, now transferring money over. As it was to CRA an overseas asset, we have declared it to them on form T1135 at the value in CAD as at Nov 2017. We had an official valuation but sold for less than the value, so no capital gains as far as Canada is concerned. No tax to pay in UK as we are now non tax payers.
Transferring the proceeds across GBP50k at a time from our UK bank account to our Canadian one using Transferwise
Transferring the proceeds across GBP50k at a time from our UK bank account to our Canadian one using Transferwise
