wandering bard

hello everyone,
I am hoping someone here might solve this mystery for me. I was told new immigrants are intitled to various tax credits on both provincial tax as well as federal.
A few days ago, a friend who happens to be another baffled immigrant, forwarded this link to me:
http://216.239.59.104/search?q=cache...+ontario&hl=en
Even after reading this page several times, I couldn't quite comprehand what I am intitled to, or IF I'm intitled to anything at all, and what do I have to do (what forms to fill out and where to file them) and so on.

thank you for your assistance,
a very daunted immigrant.

wizzard

I just went and bought a copy of QuickTax for like $30 and let it fill in the tax return for me. It asks you all the questions and has a section asking if you moved to the country in that tax year etc and has lots of resource so then you shouldn't miss anything. Seemed the simplest way to do it to my mind as having no kids and just me and my wife and being fairly young there was nothing complex related to our taxes.

Drew

wandering bard

thanks, Drew, for your reply.
May I ask if you had to enclose any kind of special forms relating to your immigration status, and whether you actually recieved any tax breaks because you were new immigrants?

CDNReturner

I've actually got a financial advisor in Canada looking into this for me at the moment. He said something about 5 years of tax breaks for new immigrants. Unfortunately he hasn't come back to me yet to verify this. Even though I'm a returning Canadian he said I'd be classed as an 'immigrant'. I didn't post anything about this here until I found out for sure as to how it works. It's interesting to hear though that you have been told this too.

wandering bard

thanks, returner.
I would love very much if you posted any info you get, when you get it. any piece of information is valueable to me as well as others here, I'm sure.
cheers!

CDNReturner

Actually, I just got this from the FA out in Canada.

" Given your
situation, an immigration trust is possible, however depending on the
investments and expected income the costs may be too high compared to the
benefits."

This probably means no more to you than it does to me. I need to think about this overnight and send him some queries tomorrow.

Bud

Hi,

I checked out the option of Immigration Trust prior to moving and still have some links left. Here they are:

http://tax.07.free.bm/
http://can-offshore.com/trust-canadian-immigrant.htm

Hope this help.

Cheers.

wandering bard

thanks, bud.
Actually, I just got more confused. Does that apply to overseas inheritence as well? I guess consulting a CPR would be a must in this situation...

CDNReturner

Just thought I'd let you know that I've heard nothing more from the FA out in Canada. I told him that I'd take his advice and the immigration trust doesn't sound so good after all. I've heard nothing from him since. I gather then that there is nothing else he can help me with. From reading those links, I got the impression you need to have at least a million dollars. Sorry, I can't help any more.

Bud

you are right, the amount of assets you would like to shield from taxation should be very substantial to justify the hustle of setting up the immigration trust.


I just googled this link and it gives the calculation of savings the trust would provide etc. http://www.business-immigrant.com/trusts.html

Cheers.

Bryan Kellar

Hi bard!

I get asked a lot about tax breaks for immigrants, and the short answer is that there really isn't anything special.

There may be some things you can do with "timing issues", for example, since you are not taxed on your income until you are a resident in Canada, then you may only have a tax the first year based upon Canadian income. But that's hardly a revelation. There also are a few credits that (because of the way they are calculated) you may get a year's worth of benefit even in a "short year." But working through a tax return would tell you that.

I would probably suggest that you might want to run your situation past a tax professional, especially the first year, if you have more than just income from a T-4 slip. But there is just not a huge deal just for new immigrants.

The website you mention does have a list of tax dedctions and credits available. However, most of them apply to everyone, not just new immigrants.

Bryan

Bryan Kellar

A comment on the example in the website you noted: There is no provision for the taxes in the country where the trust is administered. Of course, it could be in one of those "tax-free havens". Now there's a situation where I might not be comfortable keeping my (I wish) million dollars in such a country. Oh yes, for this to work, we cannot be the "owner" of our own money, just a beneficiary. While I can't directly comment on the owners of that site, the situation seems like there might be some risk factors there.

Besides, there is no guarantee that CRA couldn't find a way to tax one of these trusts -- my understanding is that they have been looking into the situation.

Also, yes, the cost of having a lawyer draw up one of these would probably be considerable. There would have to be some benefit beyond that cost. And, there is going to be a lot of profit somewhere for the trustee (apponted by the trust -- remember, you officially have no control over the money) in cash management/handling/brokerage/whatever fees in keeping this investment.

If you were even considering something like this, I would suggest consulting a lawyer -- one who does not advertise selling the set-up of this service.

There are implications beyond the tax savings considerations. I have a saying:"I can help you to pay zero taxes -- it involves having and earning no money!"

Bryan

wandering bard

Thank you, Bryan.
Since I come from a different region of the world where the tax system is utterly different, I think that, at least my first year, I am going to need the help to a professional, just to get myself familiarized with the local system.

cheers!