Foreign Asset Reporting-Canada

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Tax resident of Canada

The day you become tax resident in Canada is the base date for the valuation of any foreign assets you hold.

FOREX rate to use

The foreign exchange rate on that day that you become tax resident is the conversion factor used to determine the value in Canadian funds. You should use the 'official' GBP / CAD exchange rate as published by the Bank of Canada daily here. This has nothing to do with the actual cost to you, it is a reflection of the value as if you had disposed of, and repurchased, the assets immediately prior to landing. This is your "tax cost" of the asset in Canada.

Keep records, as you may need them for reporting purposes. This can get quite complicated. It is worth consulting an accountant in Canada.

Overseas assets and property

If you hold foreign property with a combined tax cost of $100,000 or more at any time during a year, this has to be reported on your tax returns for the years you own it.

This includes houses, bank accounts, investments, savings and any other tangible property. For example, if you purchased a house in 1980 in the UK for £25,000 and still owned it when you left the UK in 2006 and it had a market value of £200,000 and the exchange rate was then 2.2, then $440,000 is the amount to report. Note that you do not need to report foreign assets for the year you become tax resident in Canada. However, you still must report any income earned on these assets.

The Canada Revenue Agency (CRA) is primarily interested in income earning assets. If you rent out your UK home then you must report the income and the asset value. Check the box on page one of the tax return and file form T1135. There is more detailed information in the BE Wiki article called Tax Renting your UK home. However, if you retain property in the UK for personal use only (e.g., as a holiday home), then it is not necessary to report this, unless you have a capital gain if/when you sell it.

You do not need to report the value of registered personal or occupational pension funds held in the UK if at least part of the contributions into these funds have been made by an employer. Independent Savings Accounts are not covered by this exemption and are reportable. Other pension funds that consist entirely of contributions by an individual, such as Self-Invested Pension Plans may also be reportable and professional advice is recommended.

Disposal of a primary residence is not taxable, but the sale of a secondary residence is subject to Capital Gains Tax if you make a profit.

As explained in the BE Wiki article on Capital Gains Tax, any foreign gains made after the date of landing and any interest is reportable and taxable.

Please see the discussion of this issue in the BE Wiki article Tax and House Sales.

Other Links

This is one of a series of BE Wiki articles about Taxation.