Q. I immigrated to Canada in January 2000 and brought 12.000 CAD (the minimum amount) with me. At the time of my landing I was only asked how much did I bring to Canada but I wasn’t asked about my funds in my own country. Therefore, at my landing time I couldn’t declare my foreign funds to the Canadian immigration authorities.
Before coming here, I have left some money (nearly 45.000 CAD) in my foreign bank account and now I would like to transfer this money into my Canadian bank account. I heard that if the money is not declared on my goods-to- follow list, then I have to pay some extra tax for that. Is that true?
Answer: From an income tax standpoint, the timing of the transfer of the funds into Canada is not relevant. As a Canadian resident, you are taxable on your world income from the point at which you became resident in Canada. Thus, any income earned on the amount left in the foreign bank account will be subject to Canadian tax beginning at that time. To the extent the same income is also subject to either a withholding tax or income tax in the country of origin, it may be possible to claim a foreign tax credit in Canada to eliminate the potential for double taxation.
The nature of this facility is to provide a general response to a general question. Under no circumstances should anyone act on this information without obtaining analysis and counsel from a qualified advisor with respect to the specific situation.
Phillip Nadler, CA
Richter Usher & Vineberg