Re: moving back to Canada, question about tax after selling property in UK?
 

You don't put money on a GTF list. You must declare if you are carrying more than $10,000 in cash or convertible securities otherwise, as a returning Canadian, it is no concern of CBSA.

Your bank reports the transfer to FINTRAC who are in charge of keeping tabs on dirty money. They don't report to the CRA (at least, no officially). Your bank reports income they pay to you to the CRA. They don't report receipts into your account without a warrant from a court. CRA finds out when you file your tax return showing the property on your T1135 form or the disposition of the property. They may ask to see supporting documentation or they may just accept your return as filed.

The rule is the same in the UK and Canada. If you are tax-resident in one country you pay tax on your worldwide income there. In the other country you are only liable for tax on income arising in that country.

Under scenario 2 the UK interest could be subject to withholding taxes in the UK. However, it is usually paid gross and you report it on your Canadian tax return. Also note that exchange gains are taxable in Canada. If the rate is 1.75 when you move here £300,000 is worth $525,000. If you leave the money in £ and the rate rises to 1.8 when you bring it over you will receive $540,000. The $15,000 is a capital gain and $7,500 is added to your taxable income for the year.

Re: moving back to Canada, question about tax after selling property in UK?
 

Thanks for the answers and your time. As you can gather, I am not that knowledgeable on taxes. However, I've understood it now.

As long as neither CRA nor HMRC (depending on where I live) start touching my assets and just taxes the interest it actually gathers, that's fine with me.

The sale of the property would be properly documented, signed contracts etc.. So any money laundering concerns with FINTRAC can be cleared.

I guess, I should be fine.

Re: moving back to Canada, question about tax after selling property in UK?
 

Just remember to:
Get a valuation on the property when you leave
Record the exchange rate when you leave

Then when the property sells its relatively simple to work out a gain or loss based on the sale price and FX rate when the funds are transferred to Canada.

Re: moving back to Canada, question about tax after selling property in UK?
 

If dealing with deemed disposition/acquisition on taking up tax residency this is the rate to use, this is what CRA use Maintenance - Bank of Canada

The only time this would not be used is when making an FX transaction and the rate one actually gets is the prevailing rate for tax purposes.

Re: moving back to Canada, question about tax after selling property in UK?
 

Thanks so much for this thread and advice. I am in exactly the same situation. Canadian citizen, moving back to Canada in Q2-2015, having been here in the UK for 17 years. Selling house in London early 2015... but of course no guarantees it will sell before the move so I needed to have a good understanding of the potential consequences. This has really helped.

Re: moving back to Canada, question about tax after selling property in UK?
 

thanks for all the answers and contributions here.