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How much do you know about financial independence?

Jan. 29, 2017, 9:23 p.m.
Posts: 1048
Joined: May 4, 2006

Incidentally, in theory I could move this money from the UK to Canada and then put it in a TFSA but (a) it seems I would have to pay tax to CRA when I cash it in and (b) the UK:CAD exchange rate is not favorable at the moment.
Plus, there's also I chance I may need to move back to the UK at some stage so I'd rather have some funds over there…

Jan. 29, 2017, 9:24 p.m.
Posts: 1172
Joined: Feb. 24, 2017

You don't pay taxes on your mutual funds until you actually sell. And capital is taxed at a more favourable rate than interest. So in your hypothetical situation, if you buy your fund at 10k and sell for 15k, you have a gain of 5k. But you only pay tax on half that. So you pay $2500 times your tax rate.

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oh, not at all true my friend. if you own a MF outside a registered account, you will pay some investment income taxes each year. as a flow through trust, most fund unit holders will have to participate in the taxes owed on the securities bought and sold (and held) buy the fund managers on your behalf. if there are bonds in the fund, interest income will be earned and taxes owed on that. if dividends, taxes there and if any securities were sold for a gain (and this is always the case). of course it's proportionate to how many units you hold. you will get a T5 tax slip showing boxes for interest, dividends and cap gains. you have to enter these into your income tax and pay the piper. just as if you owned the securities yourself. that's where the corporate class mutual fund structure has an advantage. different thread…

Jan. 29, 2017, 10:48 p.m.
Posts: 17741
Joined: Oct. 28, 2003

6061, what exactly is your question? Too many hypothetical theoreticals in your posts to answer with google.

https://turbotax.intuit.ca/tips/declaring-foreign-property-on-your-tax-return-6217

Jan. 29, 2017, 10:52 p.m.
Posts: 17741
Joined: Oct. 28, 2003

Did find this, which may answer your q although is a few years old.

https://taxinterpretations.com/cra/severed-letters/2013-0478241e5

https://taxinterpretations.com/cra/severed-letters/2013-0485661e5

Jan. 29, 2017, 11:08 p.m.
Posts: 1048
Joined: May 4, 2006

6061, what exactly is your question? Too many hypothetical theoreticals in your posts to answer with google.

https://turbotax.intuit.ca/tips/declaring-foreign-property-on-your-tax-return-6217

I think that Turbotax link answers my question…that as I own less than $100,000 CAD foreign property, I don't need to declare it.

Jan. 29, 2017, 11:40 p.m.
Posts: 1048
Joined: May 4, 2006

Did find this, which may answer your q although is a few years old.

https://taxinterpretations.com/cra/severed-letters/2013-0478241e5

https://taxinterpretations.com/cra/severed-letters/2013-0485661e5

Fook me, can't these people write in English! Lol!

On the one hand they (the CRA CPA) states all worldwide income has to be declared and then,in the next paragraph, contradict themselves by stating it only applies if you have [HTML_REMOVED] $100,000!!

So, it appears, I'm still confused. I have a Stocks and Shares Tracker ISA. Over time, the stock price goes up and down. Any profits are re-invested.I don't manage it and I don't receive any income from it until the day I cash it in (I've had it for quite a number of years during which time the value plunged badly a couple of times during recessions but I've never added,or withdrawn, any cash).
So my question is, do I need to report or not (purely based on it never exceeding the $100k limit) and if I do have to report, how would I go about determining the annual income?

Jan. 30, 2017, 6:48 a.m.
Posts: 17741
Joined: Oct. 28, 2003

And now you are back to here. Interest and dividends in taxable account are considered income when paid to your account, even if you don't spend a penny on carbon bikes. Capital gains tax applies when you sell your fund to realize (turn the mutual fund into cash) a gain.

Talk to an accountant.

http://www.finiki.org/wiki/Tax-efficient_investing

Interest is taxed at your income tax rate.

Qualified Canadian Dividends are taxed at a preferred rate, even negative rates in some cases.

http://www.finiki.org/wiki/Dividend

Capital gains are taxed when you sell.

http://www.taxtips.ca/personaltax/investing/taxtreatment.htm

All of this is irrelevant in your TFSA - theoretically, no Canadian resident over 18 should be invested in a taxable savings or investing account before thier TFSA limit is maxed.

Jan. 30, 2017, 6:50 a.m.
Posts: 17741
Joined: Oct. 28, 2003

You could try this guy but he hasn't been very active recently and is likely busy with tax season.

http://forum.mrmoneymustache.com/taxes/can'eh'dian-tax-you-have-questions-i-have-answers/650/

Jan. 30, 2017, 12:25 p.m.
Posts: 334
Joined: Sept. 18, 2007

Fook me, can't these people write in English! Lol!

So, it appears, I'm still confused. I have a Stocks and Shares Tracker ISA. Over time, the stock price goes up and down. Any profits are re-invested.I don't manage it and I don't receive any income from it until the day I cash it in (I've had it for quite a number of years during which time the value plunged badly a couple of times during recessions but I've never added,or withdrawn, any cash).
So my question is, do I need to report or not (purely based on it never exceeding the $100k limit) and if I do have to report, how would I go about determining the annual income?

It will depend on what tax-treaties Canada has with the UK. For example if you hold an ETF or mutual funds listed on a US exchange inside of your TFSA then the US government makes you pay a 15% "foreign withholding" tax on your dividends. If instead those investments were held inside an RRSP account then due to a tax treaty between Canada and the US you wouldn't have to pay a foreign withholding tax.

Given that your investments are held inside what seems to be the UK equivalent to our TFSA provided there is some sort of tax treaty between Canada and the UK you should be fine.

Whatever financial management platform you have should be able to issue you tax documents as well and does all the calculations for you.

Should there be no tax treaty between our two countries and your financial management company/bank/whatever has no available tax forms for you, you are in for a world of hurt trying to calculate capital gains and losses and the like because if you have purchased equities/mutual funds that are on a DRIP program, you then have to perform those tax calculations every single time you get paid a dividend.

Jan. 30, 2017, 2:44 p.m.
Posts: 1048
Joined: May 4, 2006

You could try this guy but he hasn't been very active recently and is likely busy with tax season.

http://forum.mrmoneymustache.com/taxes/can'eh'dian-tax-you-have-questions-i-have-answers/650/

Hey, there's is Heckler on that forum as well! ;-)
Sounds like this is gonna be a major pain in the ass so I may cash in and bring the cash over into my TFSA and suck up the poor exchange rate….

Jan. 30, 2017, 2:53 p.m.
Posts: 17741
Joined: Oct. 28, 2003

No idea what youre talking about.

Jan. 30, 2017, 5:28 p.m.
Posts: 6
Joined: Jan. 12, 2006

I've been using TransferWise lately to transfer money from Canada to the UK. super easy to use and way cheaper than the crappy exchange rates one gets with the bank. Recommended.

Jan. 30, 2017, 5:36 p.m.
Posts: 10010
Joined: March 11, 2003

I've been using TransferWise lately to transfer money from Canada to the UK. super easy to use and way cheaper than the crappy exchange rates one gets with the bank. Recommended.

yeah agree on TransferWise, easy to transfer to from my US/CAD Accounts. Direct debit daily max is $9500 though, but super inexpensive.

Is there a Vancouver in Taiwan?! I had no idea!!

Nothing sums up my life's achievements like my stuffed corpse, suplexing a cougar.

Jan. 31, 2017, 11:31 a.m.
Posts: 6
Joined: Jan. 12, 2006

yeah agree on TransferWise, easy to transfer to from my US/CAD Accounts. Direct debit daily max is $9500 though, but super inexpensive.

Clearly, you are more baller than I if you transfer these figures daily! :lol:

Feb. 1, 2017, 11:04 p.m.
Posts: 1048
Joined: May 4, 2006

Should there be no tax treaty between our two countries and your financial management company/bank/whatever has no available tax forms for you, you are in for a world of hurt trying to calculate capital gains and losses and the like because if you have purchased equities/mutual funds that are on a DRIP program, you then have to perform those tax calculations every single time you get paid a dividend.

Ok, I'm back having read some more but not (yet) took up Hecklers advice to talk to an accountant (as I don't have one).

There does not seem to be a tax treaty between Canada and the UK.

I've read thru all the statements I've received from the ISA management company and they do not detail any individual buy/sell transactions, though they do detail their charges. Any dividends are "reinvested into the value of your units" (and these aren't detailed in their statements either) meaning, I guess, that I haven't received any income as such from dividends so have no income to declare to CRA

L[HTML_REMOVED]G Tracker Trust ISA

Note: ever since this ISA was opened, I have neither added additional funds nor cashed in anything. I still own exactly the same number of "units". The fund has grown in value as the price per unit has increased. I guess I'll get hammered for capital gains when I eventually cash in, but for now, I'm hoping my previous tax returns are good. At no stage during my ownership of the ISA has it got anywhere near the $100,000 T1135 reporting limit. Even at its max per unit value and most favorable exchange rate, it wouldn't be worth $35k…

I'll pop into H[HTML_REMOVED]R Block or see whether I can get a definitive answer direct from the CRA enquiry line…:dizzy:

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