I immigrated to Canada 2 years back and at that time I had brought just S20K as landing money. I want to repatirate my savings/assets in India to Canada to buy home. I heard new immigrant has 5 year tax holiday to bring in money/assets.

Could you please clarify how can I bring my FCNB deposits to Canada under Tax Holiday.

Thanks in Advance.

Two comments:

The word tax holiday applies to not being taxed on the income earned - not to bringing of assets into the country.

Secondly, to bring in assets into the country as assets and not income, one should have declared the exisitence of those assets on the first return filed by that person in Canada. So in case you have already declared the existence of FCNR deposits in your previous year's tax return, there is no problem in bringing it to Canada ( I have been doing it for last 5 years, whenever I need it). However, if you did not declare it, and the amount is not more than C$100k per person in your family, you need not worry about that too - simply get your bank overseas to send in a TT to your bank in Canada.

As for tax holiday, here is something that might be of use to some people (but perhaps not you since that has to be planned before coming to Canada)

The Income Tax Act does allow an immigrant to shelter non-Canadian source income and capital gain for a period of up to sixty months after their arrival in Canada. The sixty-month period commences on January 1 of the calendar year during which the taxpayer becomes resident in Canada for tax purposes. Typically, income/capital gain-producing assets that are situated outside of Canada are transferred into an "offshore trust". A non-resident financial institution is used as trustee. All income and capital gains attributable to such assets that are earned by the trust, escape Canadian tax during the period that the individual is a Permanent Resident of Canada and is in the qualification period of Canadian Citizenship. This "tax holiday" expires at the end of the sixty month period. If the trust continues in place thereafter and the person remains resident in Canada for tax purposes, the trust itself will become a resident taxpayer and liable for Canadian taxation on its world-wide income.

If, however, the Permanent Resident obtains Canadian Citizenship within the five year tax holiday window and then departs Canada after obtaining Canadian Citizenship, the income and capital gain produced by the offshore trust will never be taxed by the Canadian government. Those who choose to remain resident in Canada as Canadian residents and citizens beyond the five year period, may choose to reacquire the assets from the offshore trust at that point for a "stepped up" tax basis. They will then have a new basis equal to the fair market value of the assets at the end of the five year period. In addition, they may wish to explore one of several other strategies to extend the "tax holiday" period.

Chandresh

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Chandresh

Advice is free – lessons I charge for!!

Chandresh,

Thank you very much for the insight.

In my case, it is more than $100K in FCNR and I haven't previously declared as I was not knowing the procedure.

It is all in one name. I have already spent 2 years in Canada and have filed tax return twice without declaring this FCNRs.

Can I declare this next year tax return and move them to Canada subsequently?.

For my immediate use, can I bring in an amount less than $100K without any tax problem?.

Well, that’s a bit of a problem. Anyway that again brings us to two situations:

1. Are you married and do you have children. If yes, can you segregate the money in such a manner that none of you have more than $ 100,000 in any one name? If yes, then there is no problem – you can always claim that though the money was put into deposit in one name where you could make it a bigger amount and take advantage of higher interest rates available to higher deposit amounts, more so if it a swap deposit placed through international banks like Citi, Amex etc.. With that explanation ready, you can get the money in Canada.

2. However, that is possible ONLY if you have declared the interest income earned on that money in Canadian tax returns and paid taxes on that. In case you have not, you might (and might not) be charged tax and penalty if caught later – or else revise your return now for the previous years.

However, there is a roundabout way in which you can play around with exchange rates and save taxes – and I cannot disclose that on a public forum! (and that also leads to my professional help )

Chandresh

Quote:

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Orginally posted by anandbtm

Chandresh,

Thank you very much for the insight.

In my case, it is more than $100K in FCNR and I haven't previously declared as I was not knowing the procedure.

It is all in one name. I have already spent 2 years in Canada and have filed tax return twice without declaring this FCNRs.

Can I declare this next year tax return and move them to Canada subsequently?.

For my immediate use, can I bring in an amount less than $100K without any tax problem?.

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Chandresh

Advice is free – lessons I charge for!!

Chandreshji,
What about Insurance plans / pension plans .
Currently the value of the plan is below 100k - but by the time of the selected retirement age it may cross that - what does one do then? declare when the value crosses 100k?
The insurance / pension scheme was purchased before emmigrating .

Thanks for all your valuable info postrd on these forums
AJ

"However, if you did not declare it, and the amount is not more than C$100k per person in your family, you need not worry about that too - simply get your bank overseas to send in a TT to your bank in Canada."

Can someone send money to my account from overseas?