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Taxes on my transferred equity?

Taxes on my transferred equity?

Old Apr 30th 2023, 1:38 am
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Default Taxes on my transferred equity?

Before we moved here we sold our house. If the money (~$300k) is transferred over to Canada to save here, is it treated as taxable when it crosses the boarder? If so what’s the rate?

Unfortunately search terms like ‘immigrant savings transfer new immigrant Canada’ isn’t exactly a Google-friendly search term and it comes back with several different attempts at understanding the question.

Thanks.
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Old Apr 30th 2023, 4:58 am
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Default Re: Taxes on my transferred equity?

Originally Posted by h0bn0b
Before we moved here we sold our house. If the money (~$300k) is transferred over to Canada to save here, is it treated as taxable when it crosses the boarder? If so what’s the rate?

Unfortunately search terms like ‘immigrant savings transfer new immigrant Canada’ isn’t exactly a Google-friendly search term and it comes back with several different attempts at understanding the question.

Thanks.
If you sold your house prior to becoming tax resident (not the same as permanent resident status) in Canada, the principal sum is not taxable. After you become tax resident, any investment earnings on this sum is taxable as income. When you convert the funds, any gain (or loss) in value in CAD from when you became tax resident, to when you convert to CAD is taxable i.e. if the FX was $1.50 when you became tax resident and $1.70 when you convert the difference is taxable as CGT (e.g. on £300k this would be a taxable gain of $30,000 on the present CGT rules). Keep documentary evidence of what you had when you arrived and all the paperwork since. CRA may ask to see it. If you are in your first tax year as a new resident there is a T1135 exception, for 2nd and subsequent years be sure to file a T1135 Foreign Income Verification Statement on any most assets held outside of Canada. Penalties for failing to file this are pretty stiff.
To be sure you get it right, finding a good local accountant is worthwhile in my opinion. I would avoid tax filers/preparers, or DIY software options.
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