Tax question (wait, come back!)
 

Quick tax question to which I'm sure many of you will immediately know the answer.

• Moved to Vancouver in August 2011
• Still own a property, which was our primary residence, in the UK
• Thinking of selling the propoerty and moving the funds to Canada, to purchase here, as we now have our PR.

What are the tax implications here? I (would like to) assume as UK/Canada have a double tax treaty, it's NOT CGT-able on the profit made since we landed here? Does Canada, and specifically BC, recognise that the UK home was/is my primary residence, even if it's a) in the UK and b) we haven't lived there since August 2011?

Any help gratefully received.

Re: Tax question (wait, come back!)
 

Too late for claiming primary residence now after being here 3 years. So long as you have valuations from the day you became tax resident and have filed a T1135 for 2012 and 2013, not too many complications. Your tax libility will be for CGT in Canada on the difference in value between the day you became tax resident to the day you sell it. Both in CAD$. The bank of Canada rate can be used for conversion. If you delay bringing the funds over, any increase in CAD$ due to the FX is also a capital gain.

Re: Tax question (wait, come back!)
 

Thanks Aviator.

We haven't been here quite 3 years yet - just over 2 and a half years. That being the case, and if we can sell before we hit the 3 years, are we clear of any tax?

Re: Tax question (wait, come back!)
 

No, you are resident here, or at least, thats how CRA will see it.

Re: Tax question (wait, come back!)
 

Can only speak of my own experiences. This may or may not have been legal.

Left UK in 2008. Let a friend "rent" my house there - they paid the mortgage and upkeep. Got my Canadian PR a few years later. Sold my house in the UK. No CGT. Transferred the money to Canada. No CGT. Bought a house here.

I had always listed in my tax returns that I own foreign property over $100k. Somewhere on something I notified that the property was now sold. Haven't ever been asked any questions. *shrug*

Re: Tax question (wait, come back!)
 

If you made a gain in the sale of the property and/or the foreign exchange you had (still have) and obligation to report this and pay any tax due. Canadian tax system relies on peoples honesty (and a tax investigation office). If you get an audit or dobbed in,, you could end up with a hefty tax bill, penalties and interest. CRA usually only go back around 3 years, sometimes up to 7. If they suspect fraud, they can go back as long as they like. Once you get a tax bill, it is up to you to prove you don't owe it, not for CRA to prove you do.

You may want to seek professional advice, hope you don't get found out, or that you owed no tax.

Re: Tax question (wait, come back!)
 

Because it's real property it's actually taxable in both countries. I.e. capital gains tax in the UK and capital gains tax in Canada and you claim a foreign tax credit on T2209. The UK though didn't until recently start charging CGT on houses for non-residents, I seem to recall you had to be out of the country for five years before they gave up on it though.

Re: Tax question (wait, come back!)
 

Hi - We have a house rented out in the UK. Our primary residence is our Canadian house & we declare the income to both UK & CRA - only CRA takes the tax. UK & CRA have a double taxation agreement. I believe that as a non resident British citizen you are no longer liable to pay UK CGT after 5 years of non residency but liable for CRA CGT. CRA CGT is a lot less.

Re: Tax question (wait, come back!)
 

About to change in next tax year though. Then non residents will be liable for CGT on UK property, even after 5 years out of the UK. You will need to value your property at the start if next tax year and this will be the base price for any CGT calculation for a subsequent sale.

Re: Tax question (wait, come back!)
 

Aviator, can you please elaborate on this?

Re: Tax question (wait, come back!)