{"id":7512,"date":"2021-03-25T15:02:09","date_gmt":"2021-03-25T20:02:09","guid":{"rendered":"https:\/\/www.acomptax.com\/?p=7512"},"modified":"2021-03-25T15:02:16","modified_gmt":"2021-03-25T20:02:16","slug":"be-careful-with-your-foreign-assets-voluntary-disclosure","status":"publish","type":"post","link":"https:\/\/www.acomptax.com\/en\/international-en\/be-careful-with-your-foreign-assets-voluntary-disclosure\/","title":{"rendered":"Be careful with your foreign assets &#8211; Voluntary disclosure"},"content":{"rendered":"\n<p>In 2016, we published an article covering foreign rental properties. &#13;\n&#13;\n<\/p>\n\n<p>5 years, 312 consultations and 97 voluntary disclosures later, we decided to re-address the subject of foreign properties from a different perspective.<\/p>\n\n<h3 class=\"wp-block-heading\"><b>When to declare foreign property? Which assets?<\/b><\/h3>\n\n<p>The list of declarable assets is very long and sometimes, (CRA being the CRA) it is not clear either. <\/p>\n\n<p><b>When to declare your foreign property to the tax authorities?<\/b><\/p>\n\n<ul class=\"wp-block-list\"><li>Each year, no later than April 30 (excluding the year of immigration).<\/li><li>As soon as the cumulative (not individual) cost of these assets exceeds CAD $100,000.<\/li><li>When you&#8217;re not sure whether to make a declaration or not. You have nothing to lose. Declare it to the tax authorities.<\/li><\/ul>\n<p><b>Assets to declare for $100.000<\/b> &#8211; <span style=\"font-weight: 400;\">This list is not complete but contains more than 95% of the practical cases:<\/span><\/p>\n\n<ul class=\"wp-block-list\"><li>Real estate, bought or inherited, which are not primarily for personal use. Ex:<ul><li>Property leased for long or short term (Airbnb type)<\/li><li>Empty\/abandoned\/unused property<\/li><li>Property that does not provide shelter for you or a related person (family member)<\/li><\/ul><\/li><li>Cash in foreign accounts:<ul><li>Funds in a foreign account (bank account)<\/li><li>Short-term investments, e.g., savings account<\/li><li>Cryptocurrencies (Bitcoin, Ethereum&#8230;)<\/li><\/ul><\/li><li>Investment:<ul><li>Life insurance policy with a non-Canadian broker.<\/li><li>Investments held in an institution outside Canada, even if the property is Canadian, e.g. holding Bombardier stocks with Bank of America.<\/li><li>Investments in a foreign company account, even if held at a Canadian institution, e.g. Apple shares at Desjardins.<\/li><\/ul><\/li><li>Receivable Assets:<ul><li>Stock-options<\/li><li>Loan to a non-resident person (other than a family member)<\/li><\/ul><\/li><li>Other properties:<ul><li>Shares in a family business<\/li><li>Plots of land<\/li><li>Other types of investments, e.g., works of art, collectibles, etc.<\/li><li>Intellectual property<\/li><\/ul><\/li><li>Excluded goods that do not have to be declared:<ul><li>Some retirement accounts such as the IRA and US 401K<\/li><li>Pooled funds belonging to a Canadian institution.<\/li><\/ul><\/li><\/ul>\n<h3 class=\"wp-block-heading\"><b>Impact on your return<\/b><\/h3>\n\n<p>Making a declaration of your foreign property has no impact on your declaration as such. It is just a matter of informing Revenue Canada that you hold foreign assets worth more than $100,000. <\/p>\n\n<p>However, if these assets generate income (e.g., rental income, interest income&#8230;), this income must be disclosed. After tax treaty and foreign tax credit, you may have little or no tax to pay on this income. <\/p>\n\n<p>In both cases, you must be very careful because failing to declare either one or the other can result in significant penalties:<\/p>\n\n<ul class=\"wp-block-list\"><li>$2,500\/year in which foreign property was not declared.<\/li><li>10 to 20% of income that has not been disclosed (even if it results in no tax)<\/li><\/ul>\n<p>If you have failed to declare your foreign assets in the past, there is (thankfully) a voluntary disclosure program that allows you to cancel penalties and interest.<\/p>\n\n<h3 class=\"wp-block-heading\"><b>Voluntary disclosure program<\/b><\/h3>\n\n<p>Based on your situation and the type of omission you have made, it is necessary to prepare a federal, provincial or both disclosures. It must meet several criteria in order to be approved. Among these, the two most important are:<\/p>\n\n<ul class=\"wp-block-list\"><li><span style=\"font-weight: 400;\">Make a <strong>voluntary<\/strong> disclosure and not under the request of the authorities. It is indicated within the name.<\/span><\/li><li>Your omission must be deliberate and in good faith.<\/li><\/ul>\n<p><strong><em>*To read our last article on the subject <a href=\"https:\/\/www.acomptax.com\/uncategorized\/votre-bloc-locatif-etranger\/\">clic here<\/a> (in french only)\u00a0<\/em><\/strong><\/p>\n\n<p>Do you have to make a voluntary disclosure or not? Do not hesitate to book a consultation with one of our accountants to get a better picture of your situation.<\/p>\n<a class=\"button button_blue\" href=\"https:\/\/www.acomptax.com\/en\/income-taxes\/\" target=\"\">Tax declaration<\/a> <a class=\"button button_grey\" href=\"https:\/\/www.acomptax.com\/en\/accounting-businesses\/\" target=\"\">Services for Companies<\/a>","protected":false},"excerpt":{"rendered":"<p>In 2016, we published an article covering foreign rental properties. &#13; &#13; 5 years, 312 consultations and 97 voluntary disclosures later, we decided to re-address the subject of foreign properties from a different perspective. When to declare foreign property? Which assets? The list of declarable assets is very long and sometimes, (CRA being the CRA)&#8230;<\/p>\n","protected":false},"author":2,"featured_media":7510,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3454],"tags":[3688,3689],"series":[],"yst_prominent_words":[],"class_list":["post-7512","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-international-en","tag-biens-etrangers-en","tag-divulgation-volontaire-en"],"_links":{"self":[{"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/posts\/7512","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/comments?post=7512"}],"version-history":[{"count":0,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/posts\/7512\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/media\/7510"}],"wp:attachment":[{"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/media?parent=7512"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/categories?post=7512"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/tags?post=7512"},{"taxonomy":"series","embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/series?post=7512"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/www.acomptax.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=7512"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}