Moved back to Canada but left savings there

[pbaia1]

My husband and I moved back to Canada from the U.S. last year but we left our savings there because the CAnadian dollar was so high. Now that the dollar is beginning to drop we want to exchange what we left there and move it here. Are we subject to any taxes here in CAnada when we tranfer it over? Will we have to prove that is the amount we had when we moved back on that day? PLEASE HELP .very confused.

We are both Canadian citizens but we lived there under TN work permits for almost 8 years. (1999 to 2007)

[Steven]

Define "savings"? If you're talking about simply transferring money from a savings account at the bank, there is no tax. If you move it back to the US though and make a profit, there is capital gains tax.

[pbaia1]

We have a good amount in the U.S. The savings is as a result of the sale of our house, which happened while we were there. When we moved to the Unites States (2000) in the first place the Canadian dollar was quite low compared to the United States and we actually took our CDN savings and used them to buy a house there in the U.S. THe result was that about 140K CDN gave us 100K US. We sold our house in 2007 just before we moved and we made a profit on it. The money that we made from the house is still there. It is that money that we left there that we are wondering if we have to pay taxes on when we transfer it here. I dont think we should but I wonder if the CRA will ding us?

[Steven]

There is no tax on capital transfers unless there is a capital gain, so if you move x amount of US currency to Canada there is no tax. If you then moved it back to the US after moving it to Canada and realized a gain, then there would be capital gains tax.

The only tax requirement is that you have to declare foreign holdings over $100,000 (Canadian) to the CRA on Form T1164 when you file your T1.

[pbaia1]

Thanks so much for your answer.

If I transfer it all to canadian funds today and leave nothing in the u.s. Will I have to still declare it (prorate it for the year)?

[Steven]

Yes, I think you do, however there is an exemption from filing T1164 in the first year that you establish your tax home in Canada, depends on how long it's been since you left. If you never moved your tax home to the US (i.e. filed in the US as a non-resident) then you will have to file it.

[pbaia1]

thanks again STeve,

We moved back last year. And we had broken all ties to Canada for tax purposes for the years we lived in the states, including property, cards, drivers licenses etc.

So let me get this straight. We may not have to file that form T1164 because we restatblished our tax home here this year?

[Steven]

Yes. Remember to file all the paperwork in the US to move your tax home back to Canada though, i.e. dual-status return, 1040-C etc.