moving money
 

hi guys, wonder if anyone can give me some advice on moving money.

i'm hoping to move to canada next year, sponsored by my canadian wife. assuming the pound is still going to be in the toilet i would think we'll be leaving most of our money here for a while and crossing our fingers.

from the wiki, and other posts on the forum, i think i'm right in saying that immigrants have to pay capital gains tax on any 'profit' they make on money via improving exchange rates. but as my wife is a returning canadian would she still be in that position ? i understand she may have to pay tax, or at least declare the money earnt in interest, while its in the uk, but when she actually moves it is there any additional tax to pay ??

cheers

Re: moving money
 

Generally, the tax man isn't interested in citizenship status. My understanding is that Canada Revenue looks at investment in Sterling in the same way that they would investment in a share. Therefore, if the value of the asset appreciates, they want a cut, whether the asset is in your name or your wife's. This document explains Capital Gains, and there is a brief section about Foreign Exchange on page 18.

It isn't a one-way street. If exchange rates drop, you realise a capital loss, which can be offset against capital gains in the preceding three years or subsequent years.

Re: moving money
 

Thanks Dan - now all i need is an accountant to tell me what it says !!

I think the main part of that thats going to affect me\the wife is the foreign exchange gains and losses. this is the part i was trying to find out about. when i move to canada theres a fixed date for migration, so any effects of a changing exchange rate are easy to work out. for the wife though, she is canadian so theres no date to calculate the different exchange rates from.

looking at that document i think we'd just be using the dates in the tax year when she brings the money over, so if the exchange rate goes up over a couple of years (stay with me here, i'm sure its going to happen...) then you only take the hit for the change in that year

.....or do i need to hope theres a section for wishful thinking on the canadian tax return forms !!

cheers

Re: moving money
 

From when you become a tax resident in Canada, foreign investment assets over $100, 000 value (not cost) should be reported, any interest or other income, reported, capital gain on disposal of investment assets, reported, gain from improving exchange rate, reported. Whether you have to pay tax and how much depends on your personal circumstances.

I would get professional advice before making any decisions.

Re: moving money
 

thanks - not what i wanted to hear but you can't have everything. unless the pound simplifys everything by going back to a decent level in the next 12 months it looks like i'll be seeking professional advice (or lining all my clothes with $50 notes in a couple of years time)

Re: moving money
 

Getting professional advice ahead of time can help you plan and mitigate any liability, waiting until after the fact may end up costing more.

Re: moving money
 

The markets, however, are not quite so sure ...

Re: moving money
 

as 'the markets' don't know their @rse from their elbow it doen't bear thinking about !!

don't get me wrong, i agree with you, but one of my pet hates is the idea that the market knows. the market is actually a collection of spivs, chancers and wideboys. some sunny weather, a good result for england and their missus being accomodating and the markets go up.

if england win the world cup this summer (if i can ask for the pound to raise i don't see why my miracles have to stop there !!) then i'm quids in !!

slightly more on topic, i've tried to dig around a bit more on the subject of a canadian taking money home and what dates are used for the foreign exchange calculations. nothing concrete yet but i intend trying to ring the canadian tax office over xmas (i'm working away from home till then). for anyone in a similar position to me with a candian other half i'll update this thread with anything i find out.

come on england.......

Re: moving money
 

Yeah James, if you could let me know what happens, that would be great, as its quite an interesting topic...

Re: moving money
 

We could always bet that we just scrape through the easiest group before losing to Germany on penalties. That would then offset any further losses on the pound :rofl: