returning to Canada and then leaving again maybe

This is our main tax information forum which deals with topics concerning Canadians living and working in the U.S., U.S. citizens contemplating working in Canada, and all aspects of Canadian and U.S. income tax and related adminstrative issues.

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danny
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Post by danny »

just to confirm so i move at the end of 2010 with my personal effects and then go again to visit friends outside Canada over the holidays, I will still have to file a return (even with no income ) since I effectively became a resident as of Dec1, for instance. Is that correct ? I understand it is paperwork but can I avoid it ? thanks
nelsona
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Post by nelsona »

In canada, you never "have to" file a return unless you owe money (or need to report certain trabsactions), so the question is not whether you need to file a return, the question is if you would be considered a tax resident of canada, and my opinion is, by bringing your personal effects into canada (no doubt under a returning resident duty tariff) absent of any othe residential ties on that date.

Since you would not be entitled to much basic standard deduction, you would need to report any income earned worldwide during, say, the month of December.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
danny
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Post by danny »

sorry, I did'nt understand your statement 'and my opinion is....'. What is your opinion ? That I would not or would be considered a tax resident by bringing in personal effects?

Is the returning resident tariff higher than for new residents ?I do not remember paying for this when I moved back to Canada from US many moon years ago.

I see your point about the filing part but what I assume is that generally one files a return even with 0 income once tax residency has been established. Of course one has to report income earned but it is unlikely in December that I will be working so..
nelsona
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Post by nelsona »

... that you would be a tax resident.

You may earn interest in december, and mutaul fund distributions. These would be taxable.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
danny
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Post by danny »

thanks.

Aah yes there are other types of income to report and hence file a return to determine whether i owe or not (unlikely that I will owe but I think one needs to file).

Will try to avoid this Dec moving then for personal effects. May just be easier Jan 1
Mark T Serbinski CA CPA
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Post by Mark T Serbinski CA CPA »

The currency issue is completely separate from tax, but could be important as well. If you move back to Canada, it is not necessary for you to move all of your invesments back. In fact, you should consider the long term trends in the currency in which you are invested vs. the Canadian dollar, and the projected trends, to determine whether you should move your assets at all.

Maintaining assets in a different currency may be advantageous to you in that your portfolio will be more diversified.. albeit perhaps more difficult to manage.
Mark
danny
Posts: 91
Joined: Fri Dec 10, 2004 10:55 am

currency effect

Post by danny »

Thanks a lot Mr. Serbinski, indeed the currency effect is also something I am researching. the thing is that some countries permit non residents to have accounts for a while and some don't. So i might 'have' to move them back, however I think I should be able to hold them in Canada in the same currency as I do now. I remember having a US account when I moved back from US to Canada many moons ago. But a very good point and very rarely discussed. I am trying to hold it in the same currency until i know what the long term trends and the projected trends are. Not easy.
nelsona
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Post by nelsona »

Remember that foreign currency is considered an "investment" in the eyes of CRA, so if your foreign currency rate goes up after you move to canada, you will be liable for cap gains when you "sell" that currency, whether that 'sale" be spending it, investing it in another instrument, or even buying something with it.

You need to know the value of all yourr assets on the day you become Cdn resident.
This too is something that is often neglected.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
danny
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Joined: Fri Dec 10, 2004 10:55 am

currency effect

Post by danny »

I agree that is often neglected so determining value at the start of Canadian residence is key.

I guess one has to lose somewhere really so if the currency did become stronger and one 'sold' it ie converted to CAD, or whatever, then the capital gain is taxed. Another important point to note while holding currencies but I hope that the tax on the capital gain is offset somewhat by the advantages Mr Serbinski talked about in having a portfolio. And I think anyway it is better to risk the capital gain than convert right away to CAD. I am no expert on currencies but one could lose on currencies too.

thanks
nelsona
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Post by nelsona »

Unless you wanting to fget into currency specualtion, I would not be concerned so much with exchange fluctuation as with the cost of simply changing/transfrerring your money.

It is unlikely that in the short term your exchange gains or losses would be more than the cost of transfer/exchange.

If you need Cdn cash, bring some to canada, if you don't leave where it is unti lyou decide what you are doing.
nelsona non grata. Non pro. Please Search previous posts, no situation is unique as you might think. Happy Browsing :D
danny
Posts: 91
Joined: Fri Dec 10, 2004 10:55 am

Post by danny »

sure, will look into cost of transfer as well. thanks
danny
Posts: 91
Joined: Fri Dec 10, 2004 10:55 am

exchange rates

Post by danny »

Well a lot of countries do not allow non resident accounts these days so the exchange rate becomes key as Mark Serbinski pointed out.

On the other hand, it may be possible to open a foreign currency account in Canada and wire the transfer in the same currency to avoid currency effects. In a colleague did this but was surprised to still see that he lost a fair sum in the transfer. So i am not sure if the wire even goes through in the same currency or there is an intervening third party bank
danny
Posts: 91
Joined: Fri Dec 10, 2004 10:55 am

transfer

Post by danny »

as per above i have cashed out my pension and getting ready to transfer it to canada. nervous about currency loss and all.
danny
Posts: 91
Joined: Fri Dec 10, 2004 10:55 am

ss

Post by danny »

yes will follow up with swiss social security at retirement time thanks
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