Why has the exchange rate gone up so much lately.
Jan 13th 2014, 2:56 am
#46
Dive Bar Drunk
Joined: Nov 2006
Location: Toronto
Posts: 8,649
Re: Why has the exchange rate gone up so much lately.
The funds received may not be taxable themselves as there is no inheritance tax in Canada. Regardless of whether you keep them in the UK or Canada, what would be taxable is any investment return (interest etc) on those funds and any gain from an improved FX rate since you received them. Having PR or not is irrelevant, it is tax residency that matters.
If it is over $100,000 CAD, you also should have filed a T1135 with your tax return. Very important not to miss this (costly if you miss it and should have filed one).
Say you received £100,000 2 years ago, BOC FX rates $1.57
http://www.bankofcanada.ca/rates/exchange/ (CRA use these rates).
You exchange the funds to CAD and get $1.79, your gain is 22c or $22000, you would be taxed on $11,000. Also any interest you have received reportable reportable to CRA.
Regardless of whether funds are taxed overseas or not, you still need to report them if the source is taxable in Canada and then claim a credit for foreign tax paid, if there is a reciprocal agreement. It is a bad idea to just assume there is no tax due as you paid elsewhere and not report it.
If it is over $100,000 CAD, you also should have filed a T1135 with your tax return. Very important not to miss this (costly if you miss it and should have filed one).
Say you received £100,000 2 years ago, BOC FX rates $1.57
http://www.bankofcanada.ca/rates/exchange/ (CRA use these rates).
You exchange the funds to CAD and get $1.79, your gain is 22c or $22000, you would be taxed on $11,000. Also any interest you have received reportable reportable to CRA.
Regardless of whether funds are taxed overseas or not, you still need to report them if the source is taxable in Canada and then claim a credit for foreign tax paid, if there is a reciprocal agreement. It is a bad idea to just assume there is no tax due as you paid elsewhere and not report it.
Jan 13th 2014, 3:05 am
#47
Joined: Sep 2008
Posts: 12,830
Re: Why has the exchange rate gone up so much lately.
These are not tax exempt in Canada and foreign asset reporting still applies.
CRA don't accord the tax exempt status to an ISA if you are tax resident of Canada. The only tax exempt savings are TFSA and RRSP for most. There are also RDSP and RESP for some.
Once a tax resident, any gains on disposal will be subject to Canada tax rules if you are a tax resident of Canada.
CRA don't accord the tax exempt status to an ISA if you are tax resident of Canada. The only tax exempt savings are TFSA and RRSP for most. There are also RDSP and RESP for some.
Once a tax resident, any gains on disposal will be subject to Canada tax rules if you are a tax resident of Canada.
