Wednesday, 11 June 2014

Canada Revenue Agenciy is Looking into Your Net Worth!! Did you report all your taxable income?

Canada Revenue Agency has recently started looking at the wealth of Canadian residents.  Although this tool was always available to CRA, but has now become standard procedure. This method is used to identify unreported income.  What they do is ask you to report the cost of all your assets and liabilities at a base year say 2010 and then at the end of 2013.  If there is an increase you should be able to substantiate it by showing that your net income after tax and living expenses + capital gains increased by the same amount or you should provide other proof as to how your net worth at the end of 2013 increased.  Common sources of increase in net  worth other than after tax incomeare as follows:

1)  Gain on the sale of your principle residence.
2)  Inheritance.
3)  Gift from relatives.

This is a complicated area and every individual should be prepared. I suggest that one should perform this exercise and be prepared to account for unreported appreciation in wealth.  If you are concerned and worried consult with a professional and seriously consider a voluntary disclosure.

See my newsletter on the subject of voluntary disclosure.

for more information on taxation visit my website.

This blog is for general information only and cannot replace professional advice.
The reader is invited to contact the writer to discuss the contents of the newsletter.
Readers are advised to seek professional advice before acting on the material
in this newsletter

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