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Originally posted by vavachi

That whole thread confuses me..Can anyone recommend a good CGA or Tax accountant here who is familiar with these matters?

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That being the case, here are some simple answers to your questions:

"They have been paying taxes on this property in India but did not know they had to declare it here. Is this okay?"

No it is not okay - paying taxes in India is not enough. Depends on what was this property being used for and if the income on the same was reported or not in Canada.

"Someone told me that one option is that they sell the property and then send the money to me as a gift which I can transfer back to them here as a gift. Will this work?"

Possible - but if things were not okay ab-initio, you take a risk - more so if you bring the money to Canada to pay off the mortgage - how will your parents explain where the money came from - since they are Canadian citizens.

"Is there an accountant here in Toronto that specializes in this? can someone please help us or give us advice. They want to be mortgage free so they can finally retire."

Many available - depends on how complex your situation is and how much are you ready to pay to them. If you just want an advice, it will not cost you much, however if you want it in writing from them to back you up for your action, it could cost a few thousands in their fee.

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Originally posted by Blue_Peafowl

Sale house in India , put money in good return flexible account - bring money slowly slowly every month and pay towards your existing mortgage in Canada

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Yes..that's the best advice.

Bring it slowly & not in one lump sum & make gradual additional payments towards your MTG over here.

In the meantime you are getting 10 % interest on a Fixed Deposit in India, you will be lucky to get 1-2 % over here.

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Originally posted by vavachi

Hi friends,

I would greatly appreciate if someone could clarify this question for me as I am getting different answers.

Thank you again.

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With very few or NO details, it becomes difficult to respond back with good answers to your query, except in general terms. The problem you are experiencing is unique to you and your Parents.

Instead of pouring them out here, please meet with a reputed Tax Advisor and seek his help and guidance.

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Originally posted by vavachi
Hi friends,

My parents are now Canadian citizens and they own some property in India that they wish to sell to pay off their mortgage here. Do they have to pay tax on this money here if they do a wire transfer from their bank in India?

.

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Just doing some arithmetic, if your Parents have been in Canada and obtained their Citizenship during their stay here, it would have taken them four to five good years to get their Canadian Citizenship. While they were residing in Canada did they file any TAX Returns during those years? If so, did they mention about the property they own outside of Canada, in their tax return, and did its value at that time was over $100,000 Dollars Canadian.

The Tax Department considers that on the day they landed here in Canada, they sold their property there, in your case in India, and its value is then taken into account and it is considered as 'Deemed disposition" value. It is the same for other securities also, such as stocks, bonds, fixed deposits etc.,

If it appreciates in value then, you pay taxes on the Capital Gains. The gains/losses are the difference in value of the instrument or the property on the 31st of December of each year MINUS the value of the instrument or the fixed asset on the day of landing here in Canada. But they do not demand that you pay the taxes on these paper gains, until the property or the instrument actually gets sold.

Please bear in mind that the Indian Government will give you some relief based upon how long you held them. That is taken care of at the Indian end by an auditor or an accountant, whom you should retain at that end. The rules that existed then will apply in determining the taxes. Though they might not tax you there in India, the gains that are so generated by you are taxed here in Canada. To do that, you will have to fill in the required 'Tax schedule' here or get some help from the local tax filers, such as BLOCK or an accountant.

The proceeds from the sale are TAX-FREE and your Parents themselves can bring the sum after the Accountant files the papers through a local bank and exports the Rupees after converting it to a currency of their choice. Alternately, invest them there in a Fixed deposit and receive 9% interest. The Interest is tax-free at the Indian end. That is a safe instrument and the returns are the best. But they are subjected to the vagaries of the Rupee exchange, and currently it looks great. The interest income from this deposit is taxed at the marginal rate at which they are taxed here currently.

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Quote:

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Originally posted by vavachi

Hi friends,

They have been paying taxes on this property in India but did not know they had to declare it here. Is this okay?

Someone told me that one option is that they sell the property and then send the money to me as a gift which I can transfer back to them here as a gift. Will this work?

Thank you again.

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It is O.K., if the value of the property they own there in lesser in value and does not exceed $100,000 Canadian on the day of landing here in Canada.

Though paying taxes there in India is a fact, it only enters the picture, if you have a positive income out of that property. If it is negative, then it is a loss, but will still call for a tax filing here and it should be made known to the Income tax authorities here. Also if the income is positive and you still paid taxes there, they will provide you the benefit of such a payment made to the Indian tax authorities, as credit here and an accountant here will be able to help you with the same. There is a relief provided here by an Agreement called DTAA,(Dual Tax Avoidance Agreement)

Someone informed you wrongly and please do not follow that avenue. To avoid such complications in the future please avail proper guidance from a Lawyer or an Auditor.

The foregoing discussion is for your guidance only as a suggestion. Please contact an Accountant 'Immediately' and seek help.


FH
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