ThisisRobbo

Hey all,
Apologies for the stupid question, but I've read the Wiki and I'm none the wiser.
We're in the process of selling our home (have lived here consistently for 10 years) and current timelines suggest that the sale will complete a couple of weeks AFTER we land in Canada. If that is the case, does anyone know if we'll be required to pay tax in Canada on the proceeds from the sale?

Siouxie

Get a valuation and a copy of the contract of sale, prior to coming to Canada. You are deemed to have disposed of property on the date you become resident for tax purposes in Canada - so if you then sold it for more than that amount (i.e. the valuation at the time of moving to Canada) - it increased in value - you would have a tax liability. By completing a sale already in progress, with proof of value and proof of final sale price, you should be ok.

Look at the Canadian Tax section of https://britishexpats.com/wiki/Tax_a...e_Sales-Canada and under 'property you owned' here: https://www.canada.ca/en/revenue-age...mmigrants.html

https://www.canada.ca/en/revenue-age...rants.html#PBC

ThisisRobbo

Thanking you (as always!). I'll make sure I keep a copy of the Memorandum of Sale handy

Farmer on a bike

In some cases, if a principle residence is sold in the same calendar year that you become a tax resident, there may not be a tax liability. Seek out an accountant to help with your tax return, at least in the first year, this helps avoid costly errors and over paying taxes. The penalty for not reporting when required to do so is significant.

Farmer on a bike

If the sale completes after you become a tax resident, a memorandum of sale is after the fact. What you need is a valuation on the day you become a tax resident. A letter from a realtor should be OK. A copy of the contract of sale, pre tax residency (if it is signed and binding) and a corresponding copy of the the final completion of sale (post tax residency), so long as the two figures are the same may also suffice. The figures CRA use are always CAD and subject to FX fluctuation, don't rely on the figures in GBP. Convert to CAD on the first day of tax residency and do the same on the day of completion. When holding FX, there may be a CGT liability on the FX when changing currency. For reference FX rates, use the Bank of Canada rates, this is what CRA use, unless you convert funds within the same calendar year, then use the actual rate you obtained.

Phaedru5

Im pretty sure that a principal residence sold with the purpose of buying another principle residence isnt liable for tax anyway. If you have more than one property it may be more complicated. My house sale completed after I had moved and there were no tax implications as I was using the proceeds to by a house in Canada.

ThisisRobbo

Thanks all. That's really useful 👍

Piff Poff

In 2005 we were in the same position. We completed and deposited the money in the bank, it enabled us to buy a property here using a line of credit. No tax issues.