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Moderator Moderator Posts: 4003
Posted On: 3/31/2023
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Hello there,
Thank you for your questions about taxation, declaring funds, and financial arrangements for recent immigrants!
One good way to transfer your pension savings into Canada is to have your original bank in your home country electronically transfer the funds to a new Canadian bank account bit by bit. This method allows you to gradually access your savings in Canada without running into issues with daily limits on e-transfers. After that, it is highly advisable that you contact an accountant, a free tax clinic, or a community agency with tax-related services, to determine the taxation on your pension savings accurately. They can also advise you about what taxes you might need to declare in the April of the year after you enter the country. Taxation is a very complex process, especially when it involves foreign assets, so it’s always best to seek professional help to avoid any errors.
The taxes you pay in Canada depend on your tax residency status. Please note that “residency” for tax purposes is not the same as immigration status- some people who live only temporarily in Canada including foreign students or seasonal workers are considered “residents” who have to pay certain kinds of tax! Residents of Canada for tax purposes are people who have established significant residential ties in the country. It’s possible to establish these ties on the day of arrival in Canada, or later on. Residential ties include having a home in Canada, bringing a spouse/common-law partner or children to Canada, or owning substantial personal property in Canada such as a car. Other factors that might contribute to status as a Canadian resident for tax purposes include opening a Canadian bank account, earning a Canadian drivers’ licence, or membership in a Canadian social organisation (recreational or religious). More detailed information about tax residency qualifications can be found here. If you are unsure about your tax residency status once you arrive, you can ask the Canadian Revenue Agency (CRA) to tell you your tax status. This involves filling out and submitting an NR74 Determination of Residency Status (entering Canada) form.
As you correctly noted, if you plan to bring into Canada financial assets (including stocks, bonds, or bank drafts) with values greater than $10,000 Canadian dollars, it is very important to declare the exact amount of each asset. Failure to declare the amount accurately, or forgetting to declare something could lead to seizure of the asset and financial penalties ranging from $250 to $5000 Canadian dollars. We do not recommend bringing cash into the country in amounts greater than $10,000 CAD.
Whether you have to report money left in your bank back at home may depend on how much you have, how it is stored, and when/how you choose to transfer it to Canada, so we strongly advise that you seek assistance from a qualified accountant, advisor, or clinic to thoroughly explore your financial options. You should be aware that most foreign property worth more than $100,000 Canadian dollars (including international real estate, cash in a foreign bank account, or shares in an overseas company) will need to be reported annually through a T1135 Foreign Income Verification Form, with some exemptions. Please seek personalised assistance from a financial professional to determine how your foreign assets will be taxed once you reach Canada, what you need to report and what tax benefits you qualify for.
We hope that the information we provided was helpful to you. Please let us know if you have any further questions.
Sincerely,
Your Settlement.Org team
Disclaimer:
This document does not contain legal advice. This document was prepared with the assistance of PBSC University of Toronto law student volunteers. PBSC volunteers are not lawyers and they are not authorized to provide legal advice. This document contains general discussion of certain legal and related issues only. If you require legal advice, please consult with a lawyer.
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