Question

My great aunt left me some money 5 years ago that remains in a Swiss bank account to this day. I’m thinking of repatriating the money to Canada and I want to make sure that I don’t run a foul of the compliance or tax rules the CRA might have. Is it as simple as bringing the money to Canada or is there some specific forms that I need to fill out. The account has earned a little bit of income in the way of dividends and interests. Probably less than a thousand dollars a year. The account total range is between $500,000 and $600,000.

Any help would be appreciated.

Answer

If you have this account in Switzerland, and you haven’t reported the account or income to CRA,  your best bet is likely to file a  voluntary disclosure with CRA in order to disclose the existence of the account. and report the income. We’ll have to look at your situation in more detail, but generally speaking, you would need to file a form T1135 to report the foreign accounts and file T1 adjustment forms to properly report the additional income for each respective year.

The penalty on the late T1135 form is $2500 plus interest per year. The penalty on late tax and unreported income will be 5% of the annual reported balance plus 1% a month until paid. There’s also a further 30% to 50% penalty for gross negligence that could be applied. What you don’t want to do is send these forms in without filing under the CRA voluntary disclosure program. By filling under the CRA voluntary disclosure program, you’ll be able to submit the T-1135 and all the Canadian tax adjustments and in most cases the CRA will waive any potential penalties on the late tax returns. It’s not as simple this as we’d definitely want to look at all the information before making a determination.

Please give me a call at 250-381-2400, we can discuss in more detail.

Regards

Phil

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