What is “Taxable Canadian Property”?
For many individuals preparing their Canadian income tax returns, the term “taxable Canadian property” is probably recognizable. In fact, numerous provisions within the Income Tax Act impose tax implications regarding the disposition of this property on certain individuals, such as non-residents. As such, it is very important for Canadian taxpayers to be aware of the proper definition of taxable Canadian property, and how it affects them.
Section 248(1) of the Income Tax outlines the majority of property that is considered taxable Canadian proper. These items include the following:
- Real or immovable property situated in Canada
- Certain property used or held in eligible capital property in respect of a business carried on in Canada
- If the taxpayer is an insurer, its designated insurance property for the year
- Shares of the capital stock of a corporation that is not listed on a designated stock exchange, an interest in a partnership or an interest in a trust, if certain additional conditions apply
- Shares of the capital stock of a corporation that is listed on a designated stock exchange, a share of the capital stock of a mutual fund corporation or a unit of a mutual fund trust, if certain additional conditions apply
- An option, interest or right in a property described in the bullet points above
- A Canadian resource property
- A timber resource property
- An income interest in a trust resident in Canada
- A right to a share of the income or loss under certain agreements
- A life insurance policy in Canada
While the above list outlines the majority of the types of taxable Canadian properties, certain provisions of the Income Tax Act specifically deem other types of property to also be included within this definition. Additionally, certain items within the list above only apply if certain additional conditions apply. The interpretation and application of these additional conditions can be quite complex. Accordingly, if you are a non-resident, or if you simply think you may have dealt with taxable Canadian property in the past, it is in your best interest to talk with a tax accountant.
The tax accountants at Tax Doctors Canada have helped non-residents and other Canadian taxpayers understand their financial responsibilities regarding this property, and in the process, minimized the amount of tax they were required to pay. Tax Doctors Canada would welcome an opportunity to assist you with all of your tax accounting and tax planning needs.
Contact or call Tax Doctors Canada, an associate company of GTA Wealth Management Inc, toll free at 1 855 TAX DOCS (855 829 3627).Tax Doctors Canada offers a free initial phone consultation for all our services so do not hesitate in contacting us. For your investments, insurance, mortgage needs contact GTA Wealth Management Inc. Start saving on your income taxes and maximize your wealth potential now! We have four locations in Toronto, Mississauga and Markham to serve you.