There has extremely significant development of late for all Canadian trusts which have, or might be expected to have, non-resident beneficiaries[1]. This is because of an answer by the Canada Revenue Agency (“CRA”), to a question at the Annual Conference of the Canadian Tax Foundation (“CTF”) in November of last year. Surprisingly, as far as… Continue Reading
Author Archives: Michael Atlas
CANADIAN FOREIGN PROPERTY REPORTING REQUIREMENTS RELATING TO PARTNERSHIPS
As a general rule, Canadians are required to file form T1135 with the Canada Revenue Agency (“CRA”) for any particular year if they hold “specified foreign property” (“SFP”) having a total cost base of more than $100,000 at any time in that year[1]. SFP would encompass most forms of foreign investment property. But what happens… Continue Reading
HOW CANADIANS CAN (MAYBE) FIX A TAINTED OFFSHORE TRUST
Many affluent immigrants to Canada are beneficiaries of offshore trusts that have been established by family members overseas, either before or after they moved to Canada. With proper care and planning, the income earned in those trusts can be totally exempt from Canadian tax, even if distributed to the Canadian resident beneficiary. This assumes that… Continue Reading
CANADIANS WITH FOREIGN AFFILIATES TARGET OF 2018 FEDERAL BUDGET
The Federal Budget that was released on February 27, 2018 contained proposals that will definitely make life more difficult for Canadians who have a “foreign affiliate” (“FA”). In general terms, a non-resident corporation will be a FA of a Canadian resident if that Canadian resident owns at least 10% of the shares of any class.… Continue Reading
NEW CANADIAN TAX REGIME FOR COMBATING INCOME SPLITTING DOES NOT APPLY TO PAYMENTS TO NON-RESIDENTS
Effective 2018, there is a totally new set of rules aimed at curtailing the ability of Canadians to shift business income to family members in lower tax brackets. This is an extension of the “kiddie tax” regime that has been in place for many years. However, this “tax on split income” (“TOSI”) regime is far… Continue Reading
TAX CONSIDERATIONS FOR NON-RESIDENTS USING CANADIAN LPs
In the past year, I have had a number of inquiries from non-residents looking to register a Limited Partnership (“LP”) in a Canadian province-generally Ontario. The motivation for doing that is to have an entity that they can use for banking or credit card processing purposes that benefits from the “clean” reputation of Canada. One… Continue Reading
JULY 18 TAX PROPOSALS WILL ENCOURAGE FOREIGN OWNERSHIP OF CANADIAN CORPORATIONS
On January 15 of this year, I published an article, as part of this Blog, entitled “Wealthy Immigrants to Canada Should Consider Foreign Ownership of Cancos” (see https://taxca.com/blog-2017-1/). The thrust of that article was that better tax treatment of dividends and capital gains might result if family members, who were resident outside of Canada, held shares… Continue Reading
CANADIANS SHOULD THINK TWICE BEFORE USING U.S. 1031 EXCHANGES
Just about everyone who deals with U.S. real estate investments hears about “1031 exchanges” at one time or another. For the few who have not, it is, essentially, a mechanism whereby a gain on the sale of real estate may be deferred for tax purposes by acquiring a new property. Canadians investing in U.S. real… Continue Reading
A TAX GUIDE FOR AFFLUENT CANADIANS HEADING FOR THE EXIT-PART 5
In the last article in this series, I reviewed the basics of the dreaded Canadian “departure tax”. The purpose of this article is to discuss some special considerations applicable to expats with investment or real estate holding companies. I will outline these special considerations in point form below. 1) As I indicated in the last… Continue Reading
A TAX GUIDE FOR AFFLUENT CANADIANS HEADING FOR THE EXIT-PART 4
In the last article in this series, I explained what I call my “Guaranteed No-Fail Recipe for Becoming a Non-Resident”. Assuming that the expat is successful in becoming a non-resident, there is often a significant cost and hurdle in the form of the so-called “departure tax”. If ridding oneself from the ongoing burden of Canadian… Continue Reading