Newton08

Hi everyone,

I am new to BE and have only found this site after moving to Canada. I have been reading through different topics in the last week or so. I feel this is a very good forum and most members are giving good advice and support to other member. I wish I could have found this forum when I was looking for information about how to deal with property in the UK and bringing fund to Canada which is not available on any of the official site. I am shocked to find out that you have to pay tax on exchange gain of the fund that you originally brought in.
I am going through the initial period with the question should I stay or should I go back. I am not regretting and still think Canada is a nice country but may not be the country for us.
It is nice to know there are someone out there who cares and will help. Thank you.

Have a nice day.

dbd33

Only if it's in the form of a house abroad, surely?

iaink

If you sell assets and sit on the money, and then send it over, apparently they can tax you on any FX gains...

Aviator

If you hold currency any gain is reportable and taxable as a capital gain. Conversely if you make a loss, it is deductible as a capital loss against other capital or future capital gains.

Britain, the US, Aus, NZ, they all do the same.

dbd33

OK, not just a house but any capital gain made abroad. That's not funds at landing though. That's profit made on funds that might have been brought at landing but weren't, it's the same as bringing the money then betting it on a foreign currency.

Newton08

Apparently, when you exchange your GBP into C$, no matter how big or small of the amount, if there is a gain on exchange, you need to include in your tax return and pay tax on 50% of the gain. They compare the ex rate on the date when you landed in Canada to the rate of exchange of the transaction.

dbd33

Fair enough. I hope you moved a couple of years ago.

ireland2canada

*Wonders where on earth on the tax return forms I was supposed to tell them about this. Decides that this drop in the ocean is small fry compared to other matters*

JonboyE

Schedule 3, which ends up on line 127 of your tax return. You only need to report realized gains, and only the part of the gain made after you became tax resident in Canada. Also, an individual does not need to report FX gains if their total profit is less than $200.

ireland2canada

Ah, ok. I feel like an outlaw on the fringes of legality. One day I'll pay up the 0.78 cents I probably owe.

dbd33

All of this could matter, and potentially matter a lot, to anyone who had a house in the UK and sold it after some years when it was suddenly valuable. Such a person would need a hefty capital loss to offset the gain in house and currency value. Such a person would do well to hook up with someone who had realized a capital loss on Canadian property.

ireland2canada

"Hook up"? I hope you are not suggesting that I pimp myself out to some assimilated pauper for the benefit of tax liability? I don't imagine that there is any cheap way of off-loading an appreciated UK property and hauling the proceeds to Canada. Still, if someone takes into account the "worst case scenario" tax liability and is still happy with the remains, then it's all good.

dbd33

Not charge him, no. That'd create a whole new tax problem.

ireland2canada

Sure, add it to the pile.

Newton08

I hope so too but the application process has taken 34 months.