Hi,
I am Canadian non-resdent working in Hong Kong. My father recently died in Canada. We are concerned that the 25% non-resident tax is witheld on not only RRSP/RRIF accounts of his that are "cashed-in" - but also could be applied to the transfer of my father's non-mortgaged Ontario primrary residence house to me - we don't want to sell and will move back ion next few years (losing 25% value of the home would be far more than Hong Kong salary for a year - so it might work our better to go back to Canada ro be "resdient" again!!!)
Any knowledge would be greatly appreciated.
Anyone also know of a Hong Kong-based accountant/solicitor who's experienced in this area too?
Many thanks in advance,
Josephine
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aemom
19 yrs ago
I think you need to consult a tax accountant for this information. If no one responds here with a name, contact the Canadian Chamber of Commerce - there are probably several Canadian-trained accountants in HK.
If I understand you correctly, your father was a Canadian resident and you are a non-resident. The RRSP/RRIF will be taxed based on your father's rate. The 25% tax applies only to your earnings, for example rental income. As there is no inheritance tax in Canada (yet), from my experience, the estate will pay taxes and then the residual amounts will be dispersed to the heirs.
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thanks for suggetsing the Candian Chamber of Commerce. When we were back for the funeral we asked my father's accountant - but he didn't really know. It seems that when someone dies their RRSP/RRIF get "cashed in" (then subject to 46% tax) The problem seems to be that the 25% additional witholding tax is applied on to the sums already reduced by 46%... So, if any monies or home is considered a capital gains then any transfer of funds/ house transfer would also be subject to that 25% final tax bill - I am a teacher not an accountant so have no clue!!!
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I would suggest you speak to someone with international exposure. Most accountants and tax lawyers in Canada are familiar with domestic planning not international planning. You need to find someone who has the international exposure. I will be happy to PM you a couple of names of people whom I will recommend to you.
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Hi,
a couple of names of people you could recommend would be lost appreciated! many thanks in advance...
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LC,
I have sent you a name of one of them by PM.
HF
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Hi Josephine. Your father's estate will pay a capital gains tax on the deemed disposal of the house and income tax on the whole of the RRSP + any other income in the tax year of his death. There are no taxes on your inheritance. Renting out the house will mean tax on the net income after expenses. You might consider a modest mortgage on the house, paid out of rental, if you want cash for investment elsewhere. If you sell the house, there will be very little capital gains tax assuming that sale price is only modestly than the deemed disposal valuation. Shane Weir is a Candian solicitor in Hong Kong tel: 2526 1767
Weir & Associates
Solicitors & Notaries
2108 Gloucester Tower
The Landmark
15 Queens Road Central
Hong Kong
Tel : 2526-1767
Fax : 2868-3568
email : weirlaw@hongkonglaw.com
www.HongKongLaw.com/weirlaw
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can you confirm Shane Weir is a Canadian tax lawyer?
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