Personal Services Tyce Carle-Thiesson Chartered Accountants

We want to understand our clients' short and long-term objectives and to that end, we deliver innovative solutions beyond the traditional accounting services. We are an experienced team of professionals who provide the following services.

If you want to Rethink Chartered Accountants, give us a call!

Our personal services include:

Personal Income Tax Returns

We know that our clients' business and/or professional situations are highly integrated with their personal income tax situation. Our professional staff understands the integration and overlap issues and will provide strategies so that our clients pay the least amount of personal income tax. We will help you use RRSPs and RESPs to your best advantage.

We provide integrated tax planning services and advise so that your needs are met. And we stay on top of the latest tax changes and the ways that they might affect you and your tax situation.

We provide our clients with results!

Do you need a Chartered Accountant?

"March Madness" fits college basketball as well as the lead up to Canadian income tax deadlines. So the question becomes: "Are the services of a chartered accountant necessary to sort through the paperwork and prepare a tax return - or not?"

If the forms simply need to be completed, then the answer is "no" as "do-it-yourself" tax programs are readily available at your local computer store, plus CRA will provide useful information through a helpline at 1-800-959-8281 and through their website.

So what's the difference between completing a tax return and using the services of a chartered accountant? A chartered accountant will not only complete the tax return, but will ask questions so that tax deductions and tax credits are maximized. He/she may also identify tax breaks not claimed in prior years and amend earlier tax returns if necessary. Finally, the most valuable advice a chartered accountant can provide is the short- and long-term strategies for reducing taxes.

Often Over-Looked Tax Deductions and Credits

Business Owners/Salespeople/Employees

Claim maximum deductions for automobile, home office and promotional expenses.

Incorporated Businesses

Are owner/managers reporting too much or too little income on their personal tax returns?

Childcare Costs

In addition to daycare and nanny costs, payments to babysitters, registration fees for day and overnight camps, and before-and-after-school care all qualify as eligible childcare expenses.

Medical Expenses

Family medical expenses may be claimed as a tax credit by either parent and include extended health and dental insurance premiums, renovations to make homes wheelchair accessible, and travel/meal costs incurred while travelling out of town for medical treatment.

Other

In some cases, up to $5,000 of student's unused tuition and education tax credits can be transferred to parents. Deduct interest paid on Canada student loans and investment loans. Consider saving RRSP deductions for higher income years. Split investment income between spouses. Claim disability tax credits (if applicable) as well as caregiver and infirm dependant tax credits for those taking care of elderly parents. If a move occurred and the criteria are met, deduct moving expenses.

And if a deduction is missed in an earlier year, it may not be too late to request an adjustment. Why pay more tax than you have to!

We're here to help. Contact Tyce Carle-Thiesson at 1-866-740-0049.

Purchases & Sales of Real Estate

Non-residents Investing in Canadian Real Estate Property

Canada Customs and Revenue Agency (CCRA) imposes certain obligations on non-residents of Canada with respect to the reporting of both rental income and the gains realized on the disposition of real property within Canada.

In general, a non-resident of Canada who owns Canadian real estate is subject to Canadian withholding tax on any rental income as well as on the gain realized on disposition of Canadian real estate.

The following briefly outlines some of these implications and is meant as general guidance only, as each situation will be somewhat different.

The following summary is based on the Canadian Income Tax Act in force as of September 2003 and does not necessarily incorporate changes subsequent to that date. We would urge you to seek professional guidance when dealing with any of these matters.

Rental Income

A non-resident owner of Canadian rental property must have an agent in Canada who receives the rental income and remits the appropriate withholding tax. A non-resident who owns Canadian rental property is subject to a 25% withholding tax on the gross rents which should be remitted by the Canadian agent of the owner. However, these withholding tax payments can be reduced or even eliminated if the non-resident owner files a special form (NR6) which enables the withholding tax to be calculated on the estimated net rental income (after normal operating expenses) rather than on the gross rental income. This form is an undertaking by the non-resident owner and the agent to file a Canadian income tax return in respect of the Canadian rental property or properties. This special income tax return is referred to as a Section 216 Return.

Both the NR6 form and the Section 216 income tax return must be filed annually. The NR6 form must be filed before 31 December for the following calendar year.

Gains from Disposals

There is also a compliance requirement on the disposition of Canadian real property owned by a non-resident. The non-resident vendor must inform the Canadian government of the sale within 10 days of the closing or face a penalty. In addition, because the purchaser of the Canadian real estate property is also liable for any Canadian income taxes owed by the non-resident vendor, that purchaser is required to withhold 25%-50% of the gross proceeds of sale and remit them to the Canada Customs and Revenue Agency (CCRA) on behalf of the non-resident owner.

To avoid this withholding, the non-resident owner can file an election requesting a Compliance Certificate enabling the withholding tax to be limited to the tax on the actual gain which will be realized from the disposition. Because of the mechanics of the calculation on the withholding, the non-resident owner should receive a partial refund of the withheld Canadian tax when he or she files a Canadian income tax return for the year in which the disposal occurred. This is certainly true if the gain on the sale of the real estate property is sheltered from income tax in Canada under an international income tax treaty between Canada and the country of residence of the non-resident vendor.

If Canadian rental activity is liable to be significant, it is often carried on through a Canadian corporation which would be subject to Canadian corporate income taxes on its net income. However, if the Canadian corporation is properly structured and financed, the income can be reduced by interest expense on financing as well as management fees which may be subject to lower withholding tax rates under international tax treaties.

Goods and Services Tax (GST)

GST is Canada's value-added tax at 6% and applies to all sales of goods and services unless specifically exempted. This would include the purchase of a real estate property and the rental income earned by the property, except that used residential property, other than such property intended to be used for short-term rentals of less than 30 days, is exempt from GST. If the property is going to be subject to GST because it is going to be used in a commercial activity (i.e., short-term rentals), then the purchaser should register for GST prior to the acquisition. This way the registered purchaser becomes liable for the GST but he can also claim offsetting input tax credits so that the net remittance for GST on the purchase is Nil; and any GST collected on short-term rents may be offset by any GST paid on taxable purchases to provide the rental accommodation. GST returns must be filed on a timely basis to remit any net tax owing or to claim any net refund.

There are many intricacies in the Excise Tax Act dealing with the GST. A non-resident registrant may be required to post a security deposit, if the amounts of GST that he or she will collect in trust for the Canadian government will be significant. There are also special rebates which may be available to recover a portion of the GST paid for the purchase of a Canadian real estate property.

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Personal Services :: Tyce Carle-Thiesson Chartered Accountants

Rethink Chartered Accountants!

We want you to get the best financial and tax advice possible.

If you have any questions, we're here to help.

Phone (250) 729-8770
Toll-Free 1-866-740-0049
Email tct123@tctca.ca