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QUESTION: I am a non-resident of Canada and am currently living in Asia. =
My husband and I own a few properties in Canada. Can we just transfer =
the titles our properties completely or partially to our company, =
instead of us owning properties? Is that taxable to us or our company? =
Or do we must sell the properties to our company?
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david ingram replies:
I hope that you are filing your Canadian Rental Tax returns (even if you =
are losing money) because many people in your position use a Canadian =
address and do not file their non-resident Section 216(4) RENTAL tax =
return(s).
If not, get them done "NOW!" Failure to file them on time (or within =
two years) means a penalty of 25% of the GROSS rent received without =
allowing any deductions.
As to your question, the answer is that a disposal will result in a =
sale. Residents of Canada can roll the properties tax free into a NEW =
incorporated company under a section 85 election but I do not believe =
that a non-resident can do so and I am saying no at this point. I will =
check it later and let you know or another reader will correct me and I =
will let you know. =20
I have never seen it done in 39 years so I am "assuming" that it cannot =
be done. And, I admit that it is always a danger to "assume".
So, if you sell them to a company, you are liable for tax on the capital =
gains realized.
We would be happy to look after the returns for you.
You can find out more about Canadian rentals by going to www.centa.com =
clicking on Tax guide and then on the Rental Section. Although aimed =
primarily at US citizens and US residents, you will also find out a lot =
about International Canadian taxation for non-residents at www.centa.com =
- click on US/Canada Taxation in the second box down on the right hand =
side.
If you and your spouse have been filling in form NR-6 which you can find =
at:
http://www.ccra-adrc.gc.ca/E/pbg/tf/nr6/nr6-00e.pdf
You are likely doing in correctly. If you do not recognize the NR-6 =
form above, you are in a lot of trouble.
If you happen to be in Vancouver, you can the radio program in the =
morning at (604) 280-0600
and ask me these questions in person.
and if you are in Hong Kong or Tokyo or Manila, you can listen to the =
program live at www.600am.com and email your question in.
Answers to this and other similar questions can be obtained free on Air =
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier =
Partners and I will be hosting an INFOMERCIAL but LIVE talk show called =
"ITS YOUR MONEY"
Those outside of the Lower Mainland will be able to listen on the =
internet at
www.600AM.com=20
Local phone calls to (604) 280-0600 - Long distance calls to =
1-866-778-0600.=20
Old shows are archived at the site.
This from ask an income tax immigration planning and bankruptcy expert =
consultant guru or preparer from www.centa.com or www.jurock.com or =
www.featureweb.com. Canadian David Ingram deals daily with tax returns =
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wizard - David Ingram's US/Canada Services
US/Canada/Mexico Tax Immigration & working Visa Specialists
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4466 Prospect Road
North Vancouver, BC, CANADA, V7N 3L7
Calls accepted from 10 AM to 10 PM 7 days a week
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Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
message, this disclaimer must be included."
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