Principal Residence Sale -New Forms
October 3rd, 2016 Proposed Income Tax Measures
The income tax system provides a significant income tax benefit to homeowners disposing of their principal residence, in the form of an exemption from capital gains taxation (“the principal residence exemption”). However, there are limits to the exemption. The exemption is intended to be available only to Canadian resident individuals and trusts. Also, families are able to designate only one property as the family’s principal residence for any given year.
The proposed tax measures announced today would improve tax fairness and the integrity of the tax system. The first two measures would better ensure that the principal residence exemption is available only in appropriate cases, and in a manner consistent with the Canadian resident and one-property-per-family limits. Specifically, under these measures:
Today’s announcement also includes changes to improve compliance and administration of the tax system with respect to dispositions of real estate. In this respect, the following additional changes are announced for tax years that end after October 2, 2016:
The CRA will continue to work with provincial partners to seek ways to further improve information collected on real estate transactions, and to ensure the effective sharing of this information with tax authorities.
A Notice of Ways and Means Motion with respect to the proposed income tax measures, together with related explanatory notes, are included in today’s release. References in the Notice of Ways and Means Motion and explanatory notes to Announcement Date refer to October 3, 2016.
Notice to Reader - Warning and Disclaimer
This monthly update was prepared on October 3, 2016
Copyright @ 2016
October 6, 2016 – Ottawa, Ontario – Department of Finance Canada
Middle class Canadians are working harder than ever, but many are worried that they won’t have enough put away for their retirement. One in four families approaching retirement—1.1 million families—are at risk of not saving enough. That’s why the Government of Canada is committed to helping Canadians achieve their goal of a safe, secure and dignified retirement, and has worked with the provinces and territories to strengthen the Canada Pension Plan (CPP).
Canada’s governments agreed on June 20, 2016 to enhance the CPP to give Canadians a more generous public pension that will help them retire in dignity. All nine CPP participating provinces have now confirmed their support for the agreement concluded on June 20, 2016 in Vancouver.
On behalf of Minister of Finance Bill Morneau, Minister of Families, Children and Social Development Jean-Yves Duclos today introduced legislation in Parliament that, upon receiving Royal Assent, will mark a major step towards making this commitment a reality. By implementing the agreed-upon enhancement, Parliamentarians will be ensuring that future generations of Canadians can count on a more generous public pension in their retirement years.
The enhancement that Canada’s governments have agreed to does two things to make this happen for contributors. First, it will increase the share of annual earnings received during retirement from one-quarter to one-third. This means that an individual making $50,000 a year in today’s dollars over their working life will receive about $16,000 per year in retirement instead of roughly $12,000 today. Second, it will increase by 14 per cent the maximum income range covered by the CPP. The legislation also includes enhancements to CPP disability and survivor benefits that are proportional to the enhanced contributions going forward.
To make sure that individuals and their employers have time to adjust, increased annual CPP contributions will be phased in slowly over seven years—from 2019 to 2025—so that their impact is small and gradual.
Notice to Reader - Warning and Disclaimer
This monthly update was prepared on October 6, 2016
From Globe and Mail Friday October 21st, 2016
Indian police sting breaks up fraud ring that targeted Canadians through CRA scam
A mass police arrest in India has broken up an international fraud ring that conned Canadians into paying up to $100-million toward phony tax bills, according to the RCMP.
On Oct. 5, Indian authorities rounded up 70 people in Thane, India, suspected of running an expansive call-centre racket that perpetrated a notorious scam involving fake Internal Revenue Agency calls to U.S. citizens.
The arrests have now proven to have a Canadian twist.
Since the bust, a Canadian version of the scam – this one using fake calls from the Canada Revenue Agency (CRA) – has unexpectedly disappeared, the RCMP announced on Friday.
“After the police operation in Thane, the RCMP observed that the number of reports related to the CRA scam had significantly decreased to a small fraction of what was reported for the weeks and months leading up to these arrests,” the Mounties stated in a press release.
Since January of 2014, at least 1,900 Canadians have been duped by calls from people claiming to work for the CRA.
The imposters tell their victims they owe a large debt to the federal tax-collection agency and demand immediate payment by credit card, wire transfer or iTunes gift cards.
The callers threaten the victims, saying that any failure to pay the back taxes will result in jail time.
The Canadian Anti-Fraud Centre has received reports from victims of losses totalling $5.7-million. The organization has estimated that this represents just 5 per cent of the total losses in this country.
In all, nearly 40,000 people reported getting the calls.
Other versions of the scam involve imposters claiming to represent Immigration, Refugees and Citizenship Canada as well as various police agencies.
The Mounties are now searching for Canadian accomplices involved in the international fraud ring.
According to police in Mumbai, at least 700 people worked in the call centres, which netted more than $150,000 (U.S.) a day.
Officers seized computers, servers and other equipment in raids. Police charged the alleged ringleaders with extortion, impersonation and violations of the country’s information-technology laws.
An FBI cybercrime expert is working on the ground in Thane to share evidence, according to the Indian broadcaster NDTV.
Indian police are scouring the country for 23-year-old Sagar Thakkar, also known as “Shaggy,” the alleged mastermind of the multimillion-dollar racket.
With a report from The Associated Press
From Toronto Sun Friday October 21, 2016
TORONTO - Crooks have raked in a fortune screaming at Canadians on the phone and threatening to lock them up for unpaid taxes, but a crackdown in India has had shocking results.
Reported Canadian losses in the so-called CRA phone scam have virtually evaporated in the weeks since the Oct. 5 crackdown, during which 70 people were arrested and hundreds more questioned at bogus call centres on the outskirts of Mumbai. Numerous call centres employing more than 700 people were dismantled.
“This scam has been a very profitable enterprise for these offshore fraudsters,” Sgt. Penny Hermann said Friday.
Over the nine weeks leading up to the operation, Canadians were losing between $26,000 to $190,000 a week to the scammers, she said.
Since then? The losses have fallen dramatically, to around $2,000 a week.
Police said employees at the call centres worked the phones, convincing unsuspecting victims to wire money for outstanding taxes they didn’t actually owe.
And Hermann said American citizens were also being duped.
The fraudsters simply “tailored” their pitch to the specific country, she said, explaining Canada Revenue Agency was replaced with IRS when calling the U.S.
Hermann warned the major blow against those fraudsters doesn’t mean phoney calls are gone for good — other crooks may slither into the space vacated.
She urged Canadians to “remain vigilant,” explaining similar scams have involved callers posing as immigration officials and police officers.
Canadian Anti-Fraud Centre statistics show roughly 37,000 Canadian homes received calls from fraudsters about back taxes or immigration matters since January 2014.
More than 1,900 Canadians have reported falling for such scams and paid out more than $5.7 million over that same period.
Hermann said it is especially “disheartening” to know the reported numbers are believed to represent just 5% of the actual losses because so many Canadians choose not to tell authorities when they have been ripped off.
“These fraudsters extort money from their victims through a number of different threats,” she said, adding anyone can be targeted at any time.
Such scammers also typically asked for fees be paid through a wire service, e-transfer, pre-paid credit cards, iTunes gift cards, and most recently “Steam” cards.
“The RCMP is in the process of tracking down a number of known Canadian-based collaborators and is seeking the assistance from the public in identifying other suspects who are residing here or abroad,” Hermann said, explaining it’s believed collaborators in Canada help collect funds for fraudsters abroad.
SO CLOSE TO BEING VICTIM
John Fullerton understands why so many Canadians have been conned out of their hard-earned cash by phoney Canada Revenue Agency agents.
The GTA resident nearly fell prey to the CRA scam himself earlier this year.
“The woman who called me threatened me with jail time,” the 60-year-old printer told the Toronto Sun on Friday. “That’s what got me nervous.”
“I just wanted to pay up and get them off my back.”
Fullerton’s ordeal unfolded back in March and began with a message on his cellphone telling him to call a number back immediately because he owed money to the CRA.
The woman he later dealt with, who identified herself as Alanna Parker, told him he had been audited and accused him of defrauding the government.
“She spoke English rather well,” Fullerton said, adding he now wonders if the woman was based out of a call centre in India.
The woman “sounded convincing” and made the matter seem so urgent that Fullerton didn’t stop to question whether she was actually a government employee.
He said the fraudster initially claimed he owed $3,471, but then offered to accept $2,100 to settle the tax issue.
Fullerton was directed to make a person-to-person wire transfer to a CRA officer named Joaquin Reyes, then the woman demanded he stay on the phone with her while he withdrew cash from the bank and made the payment.
He started to become suspicious when he was told to send the wire transfer to Seattle, Wash.
Then, just before he sent the money, a post office employee told him it sounded like a scam and warned him not to go through with it.
Fullerton said he is still grateful for that warning because it spared him from being duped.
He also understands why most victims of the CRA scam and other similar frauds don’t come forward.
“You can’t help but feel like an idiot for falling for it,” he said. “But you believe that you are dealing with the government, so you take it seriously.”
A LUCRATIVE SCAM
— Statistics from the Canadian Anti-Fraud Centre and the RCMP