Luis Dos Santos

Keeping the House and Business

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Luis Dos Santos

A previous post about selling or keeping one's house got me thinking about my situation and possible scenarios. We have a soon-to-be fully paid off house and a business that is pretty much running itself and also fully paid. Would keeping my house and renting it out as well as keeping my business and continuing to receive the income from both the business and the house rental negate the proof of funds requirement? Our plan is to keep both and allow this income to keep us going in Canada while we look for jobs. Also it's a little bit of a safety net in case we can't settle and decide to return to SA....anyone else been in a similar boat?

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Nelline

You need to fulfil the proof of funds requirement. You can't "negotiate" past it by, for example, claiming possible future income.

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MaryJane

Nelline is correct about fulfilling proof of funds requirement at the time of invitation/application.

What you show as proof and how much you eventually bring with are 2 different things. So if you do show your property sale as part of your proof of funds but you don't sell it by the time you come to Canada, it's not a train smash (if you have other monies that you can use for settling). Circumstances and finances change.

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Luis Dos Santos
14 hours ago, Nelline said:

You need to fulfil the proof of funds requirement. You can't "negotiate" past it by, for example, claiming possible future income.

I get what you're saying and it holds true for the house rental as this is only possible future income. Regarding the business though, I can show financials that prove monthly income over the last 3 years and this is actual confirmed income that will be on-going...but not sure if this would be accepted.

 

8 hours ago, MaryJane said:

Nelline is correct about fulfilling proof of funds requirement at the time of invitation/application.

What you show as proof and how much you eventually bring with are 2 different things. So if you do show your property sale as part of your proof of funds but you don't sell it by the time you come to Canada, it's not a train smash (if you have other monies that you can use for settling). Circumstances and finances change.

Ok great. To fulfil the proof of funds requirement for PR prior to actually arriving there, will a property valuation with a letter of intent to sell suffice? As it stands I have no disposable cash as all my cash is invested in the property and business. I don't believe in debts so I pump everything into the assets to kill of any bonds asap.

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Marcola
16 minutes ago, Luis Dos Santos said:

I get what you're saying and it holds true for the house rental as this is only possible future income. Regarding the business though, I can show financials that prove monthly income over the last 3 years and this is actual confirmed income that will be on-going...but not sure if this would be accepted.

 

Ok great. To fulfil the proof of funds requirement for PR prior to actually arriving there, will a property valuation with a letter of intent to sell suffice? As it stands I have no disposable cash as all my cash is invested in the property and business. I don't believe in debts so I pump everything into the assets to kill of any bonds asap.

You can't use the business. You can use your pension/provident fund statements. Is that an option?

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MaryJane
23 hours ago, Luis Dos Santos said:

Ok great. To fulfil the proof of funds requirement for PR prior to actually arriving there, will a property valuation with a letter of intent to sell suffice? As it stands I have no disposable cash as all my cash is invested in the property and business. I don't believe in debts so I pump everything into the assets to kill of any bonds asap.

I know of some applicants who've used it in the past and were successful. I think at that point, the wording was that it needed to be "unencumbered funds".

Today, I went to check and I found something specific on the CIC website, which states that "you can't use equity on real property as proof of settlement funds". So that's that. http://www.cic.gc.ca/english/immigrate/skilled/funds.asp

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FaithFUL
21 minutes ago, MaryJane said:

I know of some applicants who've used it in the past and were successful. I think at that point, the wording was that it needed to be "unencumbered funds".

Today, I went to check and I found something specific on the CIC website, which states that "you can't use equity on real property as proof of settlement funds". So that's that. http://www.cic.gc.ca/english/immigrate/skilled/funds.asp

The information really is conflicting. The website clearly states as you have quoted. Yet somebody has recently used property as POF and it was successful. To me the property, even if paid off, it still encumbered as it is not a liquid form of funds until sold.

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Cornel

Hi guys, wrt rental income, does anyone know whether we will have to pay income tax in SA and in Canada

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MaryJane
5 hours ago, Cornel said:

Hi guys, wrt rental income, does anyone know whether we will have to pay income tax in SA and in Canada

Yes.

You are taxed on source of income in SA. So if you get rental income there, then you must declare this on your SA tax return.

You are taxed on your worldwide income in Canada. So if you become a tax resident here, then you would have to declare this rental income on your Canadian tax return.

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LidiaS77

@Cornel There is an Avoidance of Double Taxation Treaty between South Africa and Canada which exempts you from paying tax in both countries according to certain conditions. This treaty takes precedence over each country's domestic tax laws. Article 4 of the treaty aims to establish whether you are a resident of either Canada or South Africa only, for the purposes of the treaty and avoidance of double taxation. As far as I understand this overrides South Africa's laws on whether you are a South African resident or not, the amount of days you've been outside the country etc. Article 6 may be applicable in your case. This is the information that I've gathered after speaking to several tax specialists in South Africa and Canada. I am not an expert and would encourage you to speak to a tax specialist who is familiar with tax laws in South Africa and Canada (not everyone in this field is knowledgeable about both) to make sure that you don't do anything illegal or pay more tax than you have to.

Edited by LidiaS77
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Cornel

Thank you

 

Do you know a tax specialist who you would suggest I make contact with

 

 

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LidiaS77

@Cornel You can try Tax Consulting South Africa. I did not deal with them extensively, but they replied to my emails and were helpful and willing to answer some of my questions.

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Cornel

Thank you

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