# Transferring assets to Canada from abroad - taxation?



## yyzvoyageur (Apr 10, 2009)

Does anyone have any insight/experience with regard to transferring large amounts of money from accounts in another country (Hong Kong in this case) to Canada? Are there any taxation implications? If it makes a difference, I'm talking about money mostly resulting from the sale of property in Hong Kong.


----------



## CanadianCapitalist (Mar 31, 2009)

Yes. If you are a Canadian resident, your world wide income is taxable. Let's say your property was worth $100,000 (Canadian) in the year in which you became a Canadian resident for tax purposes. You sold the property in 2009 for $200,000 (C$). You owe capital gains taxes on your profits ($200,000 - $100,000). You might also owe taxes in your home country and you may be able to avoid double taxation based on tax treaty between Canada and your country.


----------



## HaroldCrump (Jun 10, 2009)

The _only_ way you may be able to avoid taxes completely is if you are coming into Canada as a new immigrant and bring that money with you.


----------



## PhilHogan (Nov 29, 2009)

HaroldCrump said:


> The _only_ way you may be able to avoid taxes completely is if you are coming into Canada as a new immigrant and bring that money with you.


Hi Harold

CanadianCapitalist is correct that any gain resulting from a property sale abroad could attract Canadian tax. However as he mentioned their may be relief under the tax treaty which could result in very little tax if properly addressed.

If you need help with this sale with respect to your Canadian taxes and treaty relief please give me a call at 250-661-9417. 

Phil


----------



## HaroldCrump (Jun 10, 2009)

PhilHogan said:


> Hi Harold
> CanadianCapitalist is correct that any gain resulting from a property sale abroad could attract Canadian tax.


It won't - if you are coming to Canada as a landed immigrant.
It _may_ attract tax in the country where the property is sold, but not in Canada.


----------



## PhilHogan (Nov 29, 2009)

HaroldCrump said:


> It won't - if you are coming to Canada as a landed immigrant.
> It _may_ attract tax in the country where the property is sold, but not in Canada.


This is true if he has recently entered Canada, however I was assuming he was already a Canadian resident.

Maybe he can clarify for us.

Phil


----------



## yyzvoyageur (Apr 10, 2009)

PhilHogan said:


> Hi Harold
> 
> CanadianCapitalist is correct that any gain resulting from a property sale abroad could attract Canadian tax. However as he mentioned their may be relief under the tax treaty which could result in very little tax if properly addressed.
> 
> ...


Thanks for the offer and I'll certainly keep it in mind for the future. I am a resident of Canada and always have been. The properties in question do not actually belong to me, but the proceeds (they were recently sold) will most likely be inherited by my wife one day.

This talk of a tax treaty interests me. As I understand it, Canada does not have a tax treaty with Hong Kong and the one they do have with the PRC does not apply to HKSAR. Also, as far as I'm aware, HKSAR does not have capital gains tax on real estate. I know I'm missing something here, but I'm not too sure what it is.


----------



## CanadianCapitalist (Mar 31, 2009)

yyzvoyageur said:


> The properties in question do not actually belong to me, but the proceeds (they were recently sold) will most likely be inherited by my wife one day.
> 
> This talk of a tax treaty interests me. As I understand it, Canada does not have a tax treaty with Hong Kong and the one they do have with the PRC does not apply to HKSAR. Also, as far as I'm aware, HKSAR does not have capital gains tax on real estate. I know I'm missing something here, but I'm not too sure what it is.


If you don't own the property in question, any capital gains from the sale is not attributed to you. So, there is no question of paying taxes in Canada on a property that you do not own. 

If your wife inherits the property, the ACB of the property is its value the day it came into her possession. If your wife inherits the proceeds of the sale, the proceeds are not taxable in Canada. 

As always, consult the opinion of a tax specialist. My understanding may not always be correct.


----------



## PhilHogan (Nov 29, 2009)

yyzvoyageur said:


> Thanks for the offer and I'll certainly keep it in mind for the future. I am a resident of Canada and always have been. The properties in question do not actually belong to me, but the proceeds (they were recently sold) will most likely be inherited by my wife one day.
> 
> This talk of a tax treaty interests me. As I understand it, Canada does not have a tax treaty with Hong Kong and the one they do have with the PRC does not apply to HKSAR. Also, as far as I'm aware, HKSAR does not have capital gains tax on real estate. I know I'm missing something here, but I'm not too sure what it is.


Hi

You're right, Hong Kong does not have any tax on capital gains.

Phil


----------



## OhGreatGuru (May 24, 2009)

CanadianCapitalist said:


> If your wife inherits the proceeds of the sale, the proceeds are not taxable in Canada.


The bank may want to see a copy of the will or similar documentation at the time of transfer, for purposes of reporting to FINTRAC. But there is no tax on inheritances (nor on gifts).

PS. It only took us 6 posts to figure out what the real question was. Neither the poster nor his spouse owns either the property or the money. The question is are there any tax implications if his spouse receives money from abroad either as an inheritance or a gift.


----------



## Peter Rogers (Jun 5, 2009)

I have a similar situation - my siblings and I will receive a monetary gift in 2010 from a uncle in the UK. If I understand from prior posts, this gift is NOT to be reported as income, or reported to CRA at all. 
Can someone point me to the section of the Income Tax Act that confirms that a monetary gift is not taxable?


----------



## heyjude (May 16, 2009)

I can't point to the Act, but I do have personal experience. Some years ago I received an inheritance from a family member who lived abroad. The amount was less than the threshold triggering taxation in that country. My accountant advised me that no tax was payable in Canada either. 

The same family member had also made me the beneficiary of a trust located in the US. In this case, I had to prove that the estate had been settled and all applicable taxes had been paid worldwide before I could access the principal of the trust, though I could have had access to the trust income in the interim.


----------



## josh77 (Mar 16, 2010)

I wonder what would happen if a Canadian resident inherited money from abroad, but the money was inherited from a fellow Canadian resident who had never reported said money to CRA.


----------



## OhGreatGuru (May 24, 2009)

Peter Rogers said:


> I have a similar situation - my siblings and I will receive a monetary gift in 2010 from a uncle in the UK. If I understand from prior posts, this gift is NOT to be reported as income, or reported to CRA at all.
> Can someone point me to the section of the Income Tax Act that confirms that a monetary gift is not taxable?


See "Amounts That Are Not Taxed" on p.11 of the Income Tax Guide:

_You do not have to include certain amounts in your
income, including the following:
....
■ *most gifts and inheritances*;
...._

It is not taxable income. But it may be reported indirectly to the government through FINTRAC for reasons explained earlier having to do with anti-money laundering laws. Talk to your receiving financial institution about the amount and what documentation they might need from your uncle, if any.


----------



## Rox (Oct 17, 2010)

After reading some posts here, I think if there is money flowing into Canada, Fintrac may just have a look at it if they wanted to; and if requested to, probably we can furnish some documents to show who we are, and where the money came from, etc, etc,... just to prove that the money is not from any illegal sources and gained illegally or even to be utilized illegally. No big deal there, I think,....


----------

