Archives: Answers

To determine the amount that you can deduct in respect of rent paid in part for the use of a home office, follow these steps: 1. Multiply the rent + utilities paid by 50% (since you are responsible for only 1/2 of these costs). 2. Multiply the amount calculated in step 1 by the % … Continue reading Home Office Deduction without receipt

Distributions that are a return of capital and capital gains realized from the disposition of mutual fund units are not subject to a non-resident withholding tax.

It depends on what the proceeds from the mortgage are used for. For example, if the proceeds from the mortgage are used for personal expenses, then the interest paid on the mortgage will be non-deductible. This is true even if the mortgage is secured against a rental property. On the other hand, if the proceeds … Continue reading Add Mortgage To existing Rental Property

Yes, a non-resident employee can claim a deduction on his Canadian Non-Resident Personal Tax Return pursuant to paragraph 110(1)(d) of the Canadian Income Tax Act.

Since she became a non-resident of Canada, she should contact her Pension Plan Administrator and Service Canada to inform them about her non-resident status. In this manner, the Payer in Canada will deduct taxes at source from the pension payments made to her. The rate of tax is 15% for periodic pension payments and 25% … Continue reading Canadian pension income(CPP, OAS, other pension ) receiving by non-residents

If she moves to France with her children, and (a) she does not maintain a home in Canada, and (b) you, her husband, are not residing in Canada, then she will be treated as a non-resident of Canada for tax purposes. This means that her French income will not be taxable in Canada.

If you incurred the moving expenses prior to becoming a resident of Canada, then the moving expenses incurred will not be deductible from your Canadian income.

Generally speaking, the GRIP balance is calculated on a yearly basis when filing a company’s corporate tax return. The GRIP balance in the year is equal to: + Opening GRIP Balance in the Year + Active business income in excess of $500,000 in the year + Eligible dividends received in the year – Eligible dividends … Continue reading General rate income Pool (GRIP)

A shareholder can claim an ABIL for shareholder debt that has become uncollectible. One half of an ABIL can be deducted by a shareholder against other sources of personal income he/she has in the year. For further information on how to apply for an ABIL, please visit the following site: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/lines-217-228-business-investment-loss/lines-217-228-what-happens-when-you-have-abil.html

Thank you for your question. The remaining $50,000 can be paid as a taxable dividend (other than eligible). This taxable dividend allows the company to recover part or all of the balance in the corporation’s RDTOH account.

Hi, Thank you for your question! The following are the tax implications for your mother if she sells her Toronto property: 1. Your mother’s lawyer will hold-back 25% of the sales proceeds in his Trust Account. 2. Your mother must file an application for a Certificate of Compliance in respect of the sale of her … Continue reading Capital Gain Tax Implications

Thank you for your email. You should speak with a mortgage broker that specializes in mortgages for self-employed individuals. Ask the mortgage broker whether you can make a lower down payment toward the purchase of a home if you are receiving payroll and a T4 slip from your corporation. If the answer is yes, then … Continue reading Sole Proprietorship or Corporation as a Consultant working for foreign company

There are two methods that you can use to pay yourself from your corporation: (a) dividends, or (b) salary. Dividends are reported on a T5 slip and are not subject to payroll taxes. Salary is reported on a T4 slip and is subject to payroll taxes. The method that you are currently using (i.e. subcontractor … Continue reading t4A needed OR NOT

Interest paid by a Canadian bank / Canadian financial institution to a tax resident of Honk Kong is not subject to withholding tax. In other words, you have no tax obligation to the CRA in respect of the interest received. Furthermore, you should ask your bank to cancel the incorrectly issued T5 slips and replace … Continue reading How to file taxes on Bank interest issued on T5 from 2012 to 2017 to non-residents

Owning a rental property in Canada is a secondary tie and will not cause you to remain a tax resident of Canada. Make sure there is a lease agreement in place and that rent is charged at market rates. As a non-resident of Canada owning a Canadian rental property, you will be responsible for paying … Continue reading Best Way to Emigrant Classification