Tax Status

Old Dec 24th 2006, 5:16 pm
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Default Tax Status

Hi there

I have a question regarding tax status and offshore trusts. I'm a British citizen but with dual nationality. I have a Canadian passport but have always lived in England. I'm planning to move to Vancouver in the next few months but was unsure as to my tax status when I arrive in Canada. I have been reading that immigrants to Canada can legally shelter any assets in an offshore trust for up to 5 years after arrival as Canada is an unconventional tax haven!

Does anybody know if it would be possible for me to do this or would I be treated as a Canadian citizen and therefore liable to be taxed as a Canadian due to my Canadian passport despite never having lived there?

In addition my father has been sponsored and now has permanent residence status. If I cannot set up an offshore trust for tax planning could I transfer all my shares etc to an offshore trust in his name?

Probably a question for a tax advisor but any comments very welcome...thanks...
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Old Dec 24th 2006, 6:45 pm
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Default Re: Tax Status

short and simple



what they dont know about they aint gonna find out about
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Old Dec 24th 2006, 9:07 pm
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Default Re: Tax Status

Originally Posted by skiboy10
Does anybody know if it would be possible for me to do this or would I be treated as a Canadian citizen and therefore liable to be taxed as a Canadian due to my Canadian passport despite never having lived there?
The concession only applies to landed immigrants. As soon as you become a citizen you have to bring the trust onshore or suffer the FIE tax regime.

Also you have to have a lot of money in the trust to make it truly worthwhile. With all the costs I'd say north of CAD10M.

K.
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Old Dec 24th 2006, 10:16 pm
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Default Re: Tax Status

Originally Posted by cov lad
short and simple



what they dont know about they aint gonna find out about
There is just one small wrinkle.

Canada's T1 General Income Tax and Benefit Return form asks, Did you own or hold foreign property at any time in [relevant year] with a total cost of more than CAN$100,000?

If you read the Guide that accompanies the tax return form, you find out that "foreign property" includes funds, shares, interest income, real property, etc.

If you answer, "Yes," to that question, you have to append to your income tax return a completed version of Form T1135, Foreign Income Verification Statement.
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Old Dec 24th 2006, 10:29 pm
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Default Re: Tax Status

Originally Posted by Judy in Calgary
If you read the Guide that accompanies the tax return form, you find out that "foreign property" includes funds, shares, interest income, real property, etc.
Money in a discretionary offshore trust isn't owned by you. You have a beneficial interest in it. But your general point about not declaring income and investments is quite right: wriggle to avoid large tax bills, by all means, but don't step over the line into tax evasion.

K.
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