Offshore formation for Canadians

E

Elemia

I'm a Canadian Citizen currently residing in Canada. Mostly do simple stock and options trading.

I'm getting conflicting information about using offshore formation for tax deductions. Some I spoke to say the route is sealed (doubt it), and other say it's still viable.

Anyone here with actual personal experience on this subject? Preferably Canadian as well of course.

Not looking to renounce my citizenship, but might be looking to relocate elsewhere in the future if that helps.

Thanks
 
Elemia said:
I'm a Canadian Citizen currently residing in Canada. Mostly do simple stock and options trading.

I'm getting conflicting information about using offshore formation for tax deductions. Some I spoke to say the route is sealed (doubt it), and other say it's still viable.

Anyone here with actual personal experience on this subject? Preferably Canadian as well of course.

Not looking to renounce my citizenship, but might be looking to relocate elsewhere in the future if that helps.

Thanks
More...
I looked into it years ago and figured it wasn't worth it.
You are depending on someone if an offshore jurisdiction to babysit your wealth with no recourse if they mess up or abscond with it.

In Canada the registered plans (RRSP and TFSA) let you accumulate wealth tax defered or tax free.

Of course you can't day trade or trade futures but in that case you probably will lose your capital and won't have to worry about taxes anyway. :)
 
Elemia said:
I'm a Canadian Citizen currently residing in Canada. Mostly do simple stock and options trading.

I'm getting conflicting information about using offshore formation for tax deductions. Some I spoke to say the route is sealed (doubt it), and other say it's still viable.

Anyone here with actual personal experience on this subject? Preferably Canadian as well of course.

Not looking to renounce my citizenship, but might be looking to relocate elsewhere in the future if that helps.

Thanks
More...
Whats your pnl?
If you are making under 500k/yr you can structure a corporation and pay small business tax in canada which is not so bad. 12% IIRC.

If you are above 500k and are ok with residing outside of canada (but still keeping the citizenship) there are many options - malta, antigua, cayman and some golden visa options in europe that are still possible.

This is my first year moving offshore (antigua) so i cant speak to what its like just yet.

The hardest part of the process was getting in touch with the right people. I was being quoted from 25k-115k across various vendors to set it up (Nomad Capitalist, Global Citizen Solutions, etc..)
Eventually called the guv directly and they put me in touch with a firm that only charged 2k and was super responsive (Dentons is the firm).

Process is 3 months, you pay 20k flat tax, lease a property 12 months/year and have to physically be in the country for 30 days a year. Other countries have different rules.
 
TheBigShort said:
Whats your pnl?
If you are making under 500k/yr you can structure a corporation and pay small business tax in canada which is not so bad. 12% IIRC.

If you are above 500k and are ok with residing outside of canada (but still keeping the citizenship) there are many options - malta, antigua, cayman and some golden visa options in europe that are still possible.

This is my first year moving offshore (antigua) so i cant speak to what its like just yet.

The hardest part of the process was getting in touch with the right people. I was being quoted from 25k-115k across various vendors to set it up (Nomad Capitalist, Global Citizen Solutions, etc..)
Eventually called the guv directly and they put me in touch with a firm that only charged 2k and was super responsive (Dentons is the firm).

Process is 3 months, you pay 20k flat tax, lease a property 12 months/year and have to physically be in the country for 30 days a year. Other countries have different rules.
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How will you manage your personal tax reports?
Any money that will be 'transfered' from your corporation to you will have to be declared in Canada (if you want to stay 'legit'). Unless you give up your Canadian tax status.
Just residing outside Canada doesn't qualify you as such (as you probably know!).
 
wxytrader said:
Not if you use it for day trading or even swing trading. They can tax your tfsa at 100%.

https://www.thestar.com/business/da...cle_9f852536-f97a-56a0-bbab-8856e2a7e5a7.html
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Could happen. It's something I am concerned about as I'm getting up there and my main source of income is from trading. I suppose it's something they will be taking a closer look at as the amount of wealth in TFSA increases.

The case you show has a couple things that are red flags that I don't do. Firstly the guy is a professional, he works in the financial industry, and he was day trading, which I'm not.

Also consider that cap gains are (well at least were) taxed at a favorable rate compared to income.
 
deaddog said:
Could happen. It's something I am concerned about as I'm getting up there and my main source of income is from trading. I suppose it's something they will be taking a closer look at as the amount of wealth in TFSA increases.

The case you show has a couple things that are red flags that I don't do. Firstly the guy is a professional, he works in the financial industry, and he was day trading, which I'm not.

Also consider that cap gains are (well at least were) taxed at a favorable rate compared to income.
More...

"If you trade a lot, you might be considered to be carrying on a business, "

If they can categorize you as a professional trader then you can get taxed at 100%, but on the flip side you can claim 100% of losses as well. I only trade leaps in my TFSA and set it and forget it.
 
wxytrader said:
"If you trade a lot, you might be considered to be carrying on a business, "

If they can categorize you as a professional trader then you can get taxed at 100%, but on the flip side you can claim 100% of losses as well. I only trade leaps in my TFSA and set it and forget it.
More...
I claim losses in my non-registered accounts.
If they classify me as a business then I get to write off all business expences including my annual trip to Vegas for traders expo.
 
wxytrader said:
"If you trade a lot, you might be considered to be carrying on a business, "

If they can categorize you as a professional trader then you can get taxed at 100%, but on the flip side you can claim 100% of losses as well. I only trade leaps in my TFSA and set it and forget it.
More...

most times you can trade a lot in the tfsa and they won’t care.
 
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