CRA Rqmts for USC Living in Canada via 3yr Work Permit

[rancan]

For an inter-company transfer I arrived in Toronto on Oct 15, 2014 with family and received work permits for me and the wife, and the necessary visitor record for our child. The permits are good for 3 years. We moved into an apartment in early Nov. We've never lived in Canada before. My US income ceased Oct 31 and my CAN income started Nov 1.

I manage/managed the majority of my US funds and assets (include our personal residence) via my Living Trust (LT) which in the US is treated on my Tax Return as if it didn't exist. The remaining assets (mostly funds) are/were held in a few joint accounts. I sold our US residence in Feb 2015 with the idea to buy a residence in Canada (which has yet to happen).

In 2015 I transferred enough money from one of my LT accounts to our new RBC account to support a purchase offer, and there is still significant (> $100K) funds and assets in my US accounts (including the LT) and some funds in our remaining US joint account.

I'm fairly clear on the IRS tax requirements, including disclosing the funds now in Canada. However, after reviewing CRA's information I find myself unsure about a number of things related to the CRA's tax requirements.

For Canada, how should we have filed in 2014? It seems clear that we will need to file as residents for 2015, but when do we need to file a T1135? What about the LT, do I just reference the assets or do I have some additional filing requirements for 2014 or 2015? If we need to correct our 2014 filing, is that relatively simple?

With the economies as they are, I don't believe I would have much of a gain to be concerned about, although there may be some dividend income (not a lot), but the residence gain would depend on the basis used. In the US it's a non-issue since it was our residence and the LT is ignored.

If things like the LT make my Canadian tax report unnecessarily complex I'd like to clean it up this year. We expect to request extensions to the permits, so it would be nice to have this done to simplify this and future years.

I will be traveling a lot this year, and am wondering, is there any benefit to being out of Canada for >183 days in 2016? What I mean by "benefit" is, does it give me some opportunity to file differently in 2016 that in concert with doing something with my US accounts (i.e. the LT) would make the cross-border tax situation better?

Best Regards to all.

[nelsona]

You are considered a newcomer as of Nov 1 2014, and had to file a newcomer return for 2014, and then a full-fledged resident return for 2015 and 2016. the fact that you are travelling doesn't matter. You live in Canada with your family.

there is a newcomers guide on CRA website which explains how investments you held when you arrived are treated (basically gain is zeroed out on that day) including T1135 (this form is not as big a deal as some Cdns make out. You are used to the iRS. Just follow the definitions.

if you are withdrawing funds from the trust, it isn't much of a benefit.

USC's in Canada have extra filing requiremnts with IRS that you need to be upto speed on. FBAR, PFIC,FATCA, 3520 can be searched here. This may have already been needed for 2014.

[rancan]

One other item I forgot to mention is that my Sin# starts with a 9. I mention it only because more than one Cdn has suggested it as relevant to how I file.

[nelsona]

It doesn't. It just means that unlike Cdn citizens and permanent residents, your card will at some point expire.

[rancan]

Much obliged.

I'm curious about Nov 1 as the start of Cdn Res vs the arrival date Oct 15. The tax form appears to have a place for arrival date. Does the CRA see the Oct 15 and determine Nov 1 as the Res date? Zeroing of gain should be as of which date?

From their newcomer info it looks like no T1135 needed for 2014, and first one will be for 2015.

Best Regards.

[nelsona]

"we moved into an apartment in early November". That is the date.