Personal tax accountant in Surrey

Residency, not citizenship, decides what Canada taxes

A Canadian resident is taxable on worldwide income. A non-resident is taxable only on certain Canadian-source amounts. Residency for tax purposes is determined by facts — where a home is maintained, where a spouse and dependants live, and the range of secondary connections such as accounts, licences and memberships — and not by citizenship or immigration status. That is why two people with identical passports can have entirely different filing obligations, and why the question deserves to be answered explicitly rather than assumed. It also matters in the opposite direction: someone who leaves Canada without properly severing ties can remain a resident and remain taxable on income earned abroad.

The year of arrival is a part-year return

In the year someone becomes a resident, the return covers a partial period, and several credits are prorated to reflect the part of the year during which residency existed. Income earned before arrival is generally outside the Canadian net, while income earned after it is inside — which makes the date residency began a number with real consequences. Property owned on arrival is generally treated as acquired at its value on that date for future capital gains purposes, which means recording those values at the time is worth doing. Reconstructing them years later, at a sale, is considerably harder and considerably more expensive.

Foreign property reporting is separate from taxation

Where the total cost of specified foreign property exceeds a threshold at any point in the year, a resident generally has to file form T1135. This is an information return and it is separate from whether any tax is owed — a property that produced no income at all can still trigger the filing. Specified foreign property includes funds held abroad, foreign shares and debt, and real estate held for investment, but generally excludes property used mainly in an active business and personal-use property such as a vacation home used personally. The penalties attach to the failure to file rather than to any unpaid tax, which is what makes this the most expensive routine oversight on an owner's return. See the T1135 guide.

Foreign income, and not paying twice

Income earned abroad by a Canadian resident is reported in Canadian dollars on the Canadian return, and where foreign tax has been paid on the same income a foreign tax credit is generally available to prevent it being taxed twice. That relief is not automatic — it has to be claimed, it is computed separately for each country and by category of income, and it is limited to the Canadian tax otherwise payable on that income. Rental income from property abroad, pension amounts and interest from foreign accounts are the common cases, and all three routinely go unreported by people who assume tax paid overseas ends the matter.

Where the corporation fits

An incorporated owner with international connections has one more layer: whether the corporation itself has any foreign holdings or affiliates, which can bring separate reporting of its own. The practical point for the personal return is that the two sides should be looked at together, because the same foreign asset can raise a corporate question and a personal one, and answering only one of them is how a file develops a gap. Payments to non-residents raise their own reporting, covered in NR4 slips for non-resident payments.

What is covered

One Chartered Professional Accountant handles the whole file:

• Residency determination and part-year returns on arrival or departure
• T1135 foreign property reporting
• Foreign income reporting and foreign tax credit claims
• Valuation records for property held at the date residency began
• Coordination with the corporate return and its own foreign reporting

Remote, and there is no Surrey office

EverStone has one office, in Abbotsford, and no Surrey location. Everything runs online — video meetings, e-signature and secure document upload — which for a file assembled from documents in more than one country is more practical than any office would be. See remote personal tax across Canada.