# New immigrants questions (gain tax, residency, etc)



## Pro (Apr 16, 2013)

Hello,

I am new on this forum and hope you can help me. 

We are planning to land in Canada as a new immigrants this year and now I am thinking about how we can move all our assets into Canada. 

I tried to search an answers on this forum first, but situations which I found were slightly different…

OUR SITUATION:
1.	Landing in Canada in 2013. Note: during our landing process we are planning to apply only for PR card and SIN (just to make sure that there is no residence ties to treat us as Canadian tax residents).
2.	Finally settle in Canada in 2015. 

So my questions are:

1.	How the gain tax needs to be calculated if we are selling our non-Canadian properties after became Canadian tax residents? Based on property price on date of landing or date when we became a tax residents?
2.	If our parents send us a cash gift for a quite high amount of money (500K $) and we use it as a down payment for mortgage then do we need to pay any gain tax later when we sell this property (assumption: this is our primary residence)? Will CRA treat it as an income from investment? Note: As I understood there is no gift tax in Canada and if CRA or any other authorities ask about source of this money we will show them that our parents sold a property and all taxes have been paid in their country

Sorry if it has been discussed already and I didn't found…

Thanks!


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## Pro (Apr 16, 2013)

Hi! More than 100 views... Can anybody help please?...


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## Eclectic12 (Oct 20, 2010)

Pro said:


> Hello, I am new on this forum and hope you can help me.


Welcome to CMF!




Pro said:


> We are planning to land in Canada as a new immigrants this year and now I am thinking about how we can move all our assets into Canada. ...
> 
> So my questions are:
> 
> 1.	How the gain tax needs to be calculated if we are selling our non-Canadian properties after became Canadian tax residents? Based on property price on date of landing or date when we became a tax residents?


This web article says that fair market value (FMV) is established when you become a Canadian tax resident. This will set the adjusted cost base (ACB) for say a foreign stock. When the asset is sold, the capital gain will be calculated using that value instead of what was originally paid. For a quick example that ignores commissions, paid $1 to buy, FMV the day one becomes a tax resident is $2 and sell for $5 -> rough capital gain is sold - tax resident value = $5 - $2 = $3.

http://www.cramagazine.com/issues/spring09/article05.htm

Here's another article: http://www.taxplanningguide.ca/tax-planning-guide/section-2-individuals/taking-canadian-residence/




Pro said:


> 2.	If our parents send us a cash gift for a quite high amount of money (500K $) and we use it as a down payment for mortgage then do we need to pay any gain tax later when we sell this property (assumption: this is our primary residence)? Will CRA treat it as an income from investment?


As long as the house is a primary residence, it is my understanding there will be no capital gains tax to pay. The main way that I know of for there to be income from the primary residence is if one is renting out part or all of the house, which does not sound like it would apply to you.


Bear in mind that I've been a Canadian tax resident all my life so as usual - make sure to check with appropriate experts and/or CRA.


Cheers


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## Pro (Apr 16, 2013)

Eclectic12 said:


> Welcome to CMF!


Hi *Eclectic12*! Many thanks for reply! :encouragement:

Now its a little bit clearer. A couple more questions if you don't mind...

1. TAX RETURN FORM
Do you know when we need to fill in our first tax return form? As I understood from www.taxplanningguide.ca we don't need to fill it in if :
1. we are non-tax residents
2. no income from Canadian sources
3. no claim for any benefits

Preliminary all 3 points above are relevant for us in 2013.

2. FOREIGN PROPERTY
Would it be any issue if in 2013 we declare a foreign property, but later we gift it to our parents (and they sell it and send us as a gift) and in the next year it disappears from the form… May CRA ask us of what happened?


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## OhGreatGuru (May 24, 2009)

Perhaps you haven't had many replies because we can't comprehend how you plan to:
1. Become a landed immigrant in 2013; and,
2. Apply for Permanent Resident status in 2013;

BUT
3. Don't plan to move here until 2015; and
4. Don't want to be a Canadian resident for tax purposes until 2015.

I think you you should consult an immigration lawyer and a tax lawyer. This is above my pay grade.


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## bayview (Nov 6, 2011)

Hi Pro,

Welcoming you in advance to Canada and CMF!.

Tax is a very technical topic, especially for new immigrants. 

Although there are some knowledgeable regular posters here (but not tax nor immigration experts) I too will underscore the advice given by others to seek out authoritative feedback from CRA and /or a tax professional (qualified accountant) for the assurance that you are doing the right thing. Hopefully some of them will come in to give their comments. One regular here has even blogged about Foreign income reporting. But without his/her permission I will not named the person. I'm sure you can find lots of useful info online for eg like this.

First like you are doing now you need to determine when you are officially tagged a tax resident since you are landing first but not staying on permanently and returning 2 years later. I have come across different advice from different accountants. The safest answer and the laziest way out is simply assumed the landing date is the date the new immigrant becomes a tax resident but this may not necessary be the case. Each immigrant's circumstance and background are different although the general rules and guidelines are there.

As with regards to disclosure of foreign property (in generic terms and not merely real estate) if the total cost exceed C$100k, the CRA requires the tax resident to disclose the info in the 2nd year of filing Canadian tax return.

Personally I feel it is worthwhile to get a tax professional to prepare & file at least your FIRST year's tax return unless you deemed yours to be very very basic and you are capable of handling it yourself.

If one is based in Toronto, it will cost about C$400-$500 before tax in today's rates to engage a small but respective accounting firm to file tax returns for a say a family of 3 tax residents.

All the best.


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## Pro (Apr 16, 2013)

OhGreatGuru said:


> 1. Become a landed immigrant in 2013; and,
> 2. Apply for Permanent Resident status in 2013;
> 
> BUT
> ...


Hi OhGreatGuru! Yes, you are right about our plans. :encouragement: Currently I am working on a large scale global IT implementation project which will be completed by the end of 2014 and this is only the reason why we are not permanently moving to Canada this or next year. I think it is not so rare for new immigrants when they landed and come back to their country to finish some business…



bayview said:


> Hi Pro,
> Welcoming you in advance to Canada and CMF!.


Hi bayview! Thanks!



bayview said:


> But without his/her permission I will not named the person.


Just in case would you mind to send me a message to my forum’s account with the name please?
Do you know roughly how much such advise could cost?



bayview said:


> First like you are doing now you need to determine when you are officially tagged a tax resident since you are landing first but not staying on permanently and returning 2 years later.


Am I right that I can officially ask CRA about my tax residency (form NR74 Determination of Residency Status (Entering Canada) ) ? http://www.cra-arc.gc.ca/E/pbg/tf/nr74/nr74-12e.pdf
If yes then do you know when I need to do it (it is not clear from the form…)?
If I send this form to CRA may they send me their reply to non-Canadian address?



bayview said:


> As with regards to disclosure of foreign property (in generic terms and not merely real estate) if the total cost exceed C$100k, the CRA requires the tax resident to disclose the info in *the 2nd year of filing Canadian tax return*.


Could you please point me where you read about this rule?



bayview said:


> Personally I feel it is worthwhile to get a tax professional to prepare & file at least your FIRST year's tax return unless you deemed yours to be very very basic and you are capable of handling it yourself.
> If one is based in Toronto, it will cost about C$400-$500 before tax in today's rates to engage a small but respective accounting firm to file tax returns for a say a family of 3 tax residents.
> All the best.


“FIRST year’s tax return” – do you mean the first year when I became a tax resident? As I understood I don’t need to submit the tax return form if I am non tax resident…

Just one general comment about advisers/advocates… I am a consultant myself (in IT area) and I know how important a proper advise/consultation. But from other hand I remember when we were preparing our documents for immigration I was thinking about immigration advocates, but once I read a lot of negative feedbacks when people paid hundreds and thousands dollars, didn’t get a visa and finally went through the whole process by themselves we decided to do it by ourselves. Am I right that a tax advisor has no responsibility in case of any issues with CRA (when we are following his/her advises)? 

I apologies in advance if somebody has been offended... I am just trying to understand myself first before to go to tax advisers…

Thanks you all for help!


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## Pro (Apr 16, 2013)

Pro said:


> Am I right that I can officially ask CRA about my tax residency (form NR74 Determination of Residency Status (Entering Canada) ) ? http://www.cra-arc.gc.ca/E/pbg/tf/nr74/nr74-12e.pdf
> If yes then do you know when I need to do it (it is not clear from the form…)?


Just found an answer on thess questions here (T4055 Newcomers to Canada, page ) http://www.cra-arc.gc.ca/E/pub/tg/t4055/t4055-12e.pdf

_If you are not sure whether you are a resident of Canada for 
income tax purposes, complete Form NR74, Determination of 
Residency Status (Entering Canada). Send us the form as soon as 
possible so we can give you an opinion on your residency status 
before your tax return is due.​_


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