Contact us on (403) 209 - 2248 or help@ncca.co

Pay close attention to your foreign assets to avoid tax troubles

Pay close attention to your foreign assets to avoid tax troubles


Pay close attention to your foreign assets to avoid tax troubles

Source: The Globe and Mail
Author: Jonathan Chevreau

Most high-net-worth investors have accumulated a good chunk of their wealth in non-registered investments. Once they max out RRSPs and TFSAs, there’s little choice but to add investments to non-registered, taxable accounts.

If you opt to hold the most tax-inefficient assets – fixed income – in registered accounts, odds are you’re holding a lot of stocks outside them. If they’re considered foreign property, you need to pay close attention to their cost base.

Registered retirement savings plans (RRSP) and tax-free savings accounts (TFSA) shield us from a lot of tax, at least in the short term, but what’s less appreciated is that registered plans also shield us from a lot of tax-related, form-filling paperwork.

Not so for non-registered accounts. When you fill out your annual tax return, there’s a question on whether or not you own more than $100,000 of “specified foreign property” (SFP). If you do and tick “yes” on the accompanying box, you’re on the hook to file a T1135 form. Failure to do so can generate penalties of $25 a day up to $2,500, plus other possible gross negligence penalties, says Frank DiPietro, assistant vice-president, tax and estate planning for Mackenzie Investments.

Read the full article here.

0 Comments

Leave a reply

Your email address will not be published. Required fields are marked *

*