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Old 02-11-2010, 08:58 AM   #1076
TaxGuru
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Re: Canadian Online Poker Tax Thread

One further question--how certain are you that they would not be taxable in the UK?
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Old 02-11-2010, 10:22 AM   #1077
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Re: Canadian Online Poker Tax Thread

gambling winnings from a liscenced casino in the UK are not taxable to UK residents. all the big sites afaik have a liscence to practice in the UK. poker is considered gambling since casinos and card rooms fall under the definition in that law.

the only way not to get taxed as a dual citizen is if you move to the UK, sell your primary residence and car in canada, cancel your driving liscence and medicare car. then you won't be considered a canadian resident in the eyes of the CRA and you're off the hook. oh and you don't even have to become a british citizen to do all of that.
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Old 02-11-2010, 10:11 PM   #1078
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Re: Canadian Online Poker Tax Thread

Ya I wasn't sure how the tax treaty would work. Lets say that I have dual citzenship, and I live half the year in mexico. I have UK citzenship and Canadian. Why would the Canadian government be more entitled to taxing me than the UK government for the income I made during my period of time out of the country.I can see if I lived in Canada obviously the canadian government is entitled then to tax me, but when I'm outside of the country, then I don't see how it gets decided which government gets the tax.
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Old 02-12-2010, 12:33 AM   #1079
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Re: Canadian Online Poker Tax Thread

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Originally Posted by YouSureSir View Post
Ya I wasn't sure how the tax treaty would work. Lets say that I have dual citzenship, and I live half the year in mexico. I have UK citzenship and Canadian. Why would the Canadian government be more entitled to taxing me than the UK government for the income I made during my period of time out of the country.I can see if I lived in Canada obviously the canadian government is entitled then to tax me, but when I'm outside of the country, then I don't see how it gets decided which government gets the tax.
I'm not sure how UK tax laws treat citizens abroad, but in Canada it has nothing to do with citizenship. The CRA has its own definition of what makes you a resident for tax purposes. If you were to reside in Canada for more than 182 days in one year, no matter what your legal status in the country is
was (student visa, permanent resident, citizen, etc.), then you have to start paying taxes as of that year. To stop paying taxes in Canada you have to do all of the following:

1- leave the country
2- get rid of all your primary assets
3- close bank accounts, surrender driving liscence and medicare card
4- if you're married and have kids, you need to move them with you

if you fail to do at least one of the above, the CRA can still come after you for taxes on your worldwide income. And you don't even have to be a citizen or a legal resident for them to come after you for taxes.

I know in the US it doesn't work the same way. As long as you're a US citizen who's resided in the US at some point in your life, then you owe the government taxes on your worldwide income.

Canada and UK have an extensive tax treaty to deal with cases where their citizens end up living in each others respective countries. But as a Canadian living in the UK, you more or less end up paying the same amount of taxes you'd pay in Canada. Basically, you pay your UK portion for residing there, and Canada gets the difference b/w the Canadian rate and UK rate (not absolutely sure about this, but not far off either).

Now if you were to reside in Canada first, then move to the UK without severing your ties to Canada (four steps above), then move to Mexico without severing UK ties, not sure if any treaty covers this. But it would be an interesting case study for a tax lawyer.
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Old 02-12-2010, 08:54 AM   #1080
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Re: Canadian Online Poker Tax Thread

The "dual residence" case you're describing is covered by Article IV of the Canada-UK Tax Treaty (quoted below). The upshot is that where you are otherwise resident in both places, there are some tie-breaker rules that determine which state should have the jurisdiction to tax your worldwide income. Roughly speaking, it turns on:

1. the country in which the person has a "permanent home" (if both or none, then go to 2)
2. the country that is the "centre of the person's vital interests" (if this is a "tie", then go to 3)
3. the country in which the person has a "habitual abode" (if both or neither, then go to 4)
4. the country in which the person is a "national" (this is more or less equivalent to citizen, if both or none, then go to 5)
5. the competent authorities in both countries will have to agree about which state to make the individual resident it

Here's the full text of the treaty provision:

Article 4

Fiscal Domicile

1. For the purposes of this Convention, the term "resident of a Contracting State" means any person who, under the law of that State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that Contracting State in respect only of income from sources therein.

2. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows:

(a) he shall be deemed to be a resident of the Contracting State in which he has a permanent home available to him. If he has a permanent home available to him in both Contracting States, he shall be deemed to be a resident of the Contracting State with which his personal and economic relations are closer (centre of vital interests);

(b) if the Contracting State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either Contracting State, he shall be deemed to be a resident of the Contracting State in which he has an habitual abode;

(c) if he has an habitual abode in both Contracting States or in neither of them, he shall be deemed to be a resident of the Contracting State of which he is a national;

(d) if he is a national of both Contracting States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement.
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Old 02-18-2010, 07:15 AM   #1081
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Re: Canadian Online Poker Tax Thread

I answered yes but now I am having some doubts about if I gave correct advice.

Poker player who does not claim any income (does not declare winnings) is in a common-law relationship with a girl. Can he claim the Ontario credit for rent paid if she has income that is high enough to disqualify her.

I said he could but in retrospect I'm not sure if that is correct. Any thoughts?
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Old 02-18-2010, 12:09 PM   #1082
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Re: Canadian Online Poker Tax Thread

If they were considered common law and lived together on Dec 31, then they only get one claim between them and file based on their joint income.
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Old 02-18-2010, 12:16 PM   #1083
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Re: Canadian Online Poker Tax Thread

Ok so I was wrong.

I said that only one of them would get to claim it but not that they would be disqualified because her income it too high to get the credit. The joint income part is what screwed me up.

It seemed off after I said it since then all couples with a homemaker would qualify which seems like a lot of money going out for people who made be part of a household with substantial income.

Thanks. Sent e-mail correcting myself.
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Old 02-18-2010, 01:50 PM   #1084
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Re: Canadian Online Poker Tax Thread

WRT to common law - what is the point where common law applies and has adv/disadv for tax filing purposes? What are some outlines of those?
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Old 02-18-2010, 05:57 PM   #1085
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Re: Canadian Online Poker Tax Thread

I'm not sure what you're looking for.

Common law always applies (assuming similar situations) but may change over time as social conditions change.

As it pertains to gambling, the advantage is:
The bar has been set very high as to what it takes to be considered a pro.

The disadvantage is that the concept that one could be a professional at gambling and thus taxable) has been accepted by the courts in principal.

Further, one could say that because most common law is old certainly not in the modern internet gambling age), much of the common law may not be applicable any more because social norms and economic realities have changed so much since then.
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Old 02-18-2010, 05:59 PM   #1086
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Re: Canadian Online Poker Tax Thread

Bah I guess I wasn't clear. I just mean wrt to income in general. Not gambling income or anything to do with it. When does common law come into effect (after living together for x years?) What are advantages of common low to do with filing taxes in general? (if a wife stays at home with kid for example).
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Old 02-18-2010, 06:05 PM   #1087
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Re: Canadian Online Poker Tax Thread

You get to transfer her personal exemption to you. Possibly some other deductions of hers that you could transfer if she took classes or something.

If you had any pension income you could income split on that.
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Old 02-18-2010, 06:06 PM   #1088
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Re: Canadian Online Poker Tax Thread

I'm pretty sure he means common-law marriages, the common law as in common law vs civil/code law.
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Old 02-18-2010, 06:10 PM   #1089
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Re: Canadian Online Poker Tax Thread

Ya, marriages...
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Old 02-18-2010, 06:11 PM   #1090
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Re: Canadian Online Poker Tax Thread

Usually if you've been living together for more than 1 year than you are considered common law.
You are then considered the same as married.

She would then be entitled to support if you break up.

Tax wise, you can claim her as a dependent, transfer credits and income split.
Downside is things like determining GST credits and provincial tax credits sue joint income and thus limits your ability to get tax credits.

There is no advantage of common law unless 1 partner has 0 income.
But then, you don't really have a choice - if you are, you are and you must file as common law so there is no choice.

Last edited by TorontoCFE; 02-18-2010 at 06:16 PM.
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Old 02-18-2010, 08:06 PM   #1091
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Re: Canadian Online Poker Tax Thread

Common law qualifications vary depending on what province you are in. Saskatchewan for instance you are common law after living under the same roof for 2 years. Google for your specific province.
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Old 02-19-2010, 01:37 AM   #1092
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Re: Canadian Online Poker Tax Thread

I only vaguely remember family law and this isn't legal advice but from what I recall the wikipedia page on this subject is fairly accurate for Ontario:

"In Ontario, the Ontario Family Law Act specifically recognizes common-law spouses in sec. 29, dealing with spousal support issues; the requirements are living together for no less than three years[8] or having a child in common and having "cohabitated in a relationship of some permanence". The three years must be continuous, although a breakup of a few days during the period will not affect a person's status as common-law. However, the part that deals with marital property excludes common-law spouses, as sec. 2 defines spouses as those who are married together or who entered into a void or voidable marriage in good faith. Thus, common-law partners do not always evenly divide property in a breakup, and the courts have to look to concepts such as the constructive or resulting trust to divide property in an equitable manner between partners. Another difference that distinguishes common-law spouses from married partners is that a common-law partner can be compelled to testify against his or her partner in a court of law."

So there aren't the exact same rules regarding marital property acquired during the marriage, although if you divide your labour so as to benefit each other (eg she stays home so you can work, or you work a joint business in your name) then I imagine there might be some division of property granted on the basis of a constructive trust. Disclaimer: I am not a family law lawyer.
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Old 02-19-2010, 09:03 AM   #1093
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Re: Canadian Online Poker Tax Thread

For tax purposes (Income Tax Act), there is one definition for all of Canada.
This is NOT the same definition used for propoerty division, benefots or any other purposes.


Common-law partner
A common-law partner applies to a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:

a) has been living with you in a conjugal relationship for at least 12 continuous months;

b) is the parent of your child by birth or adoption; or

c) has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.

In addition, an individual immediately becomes your common-law partner if you previously lived together in a conjugal relationship for at least 12 continuous months and you have resumed living together in such a relationship. Under proposed changes, this condition will no longer exist. The effect of this proposed change is that a person (other than a person described in b) or c)) will be your common-law partner only after your current relationship with that person has lasted at least 12 continuous months. This proposed change will apply to 2001 and later years.

Note
The term "12 continuous months" in this definition includes any period that you were separated for less than 90 days because of a breakdown in the relationship.
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Old 02-19-2010, 04:51 PM   #1094
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Re: Canadian Online Poker Tax Thread

CCA Question.

If you have a partnership convert into a sole-proprietorship in October (new business license / new GST) how do you deal with CCA?

I was told you do the full year CCA on the original business and then the new business gets to do 1/2 CCA under the first year rule.

Does that sound right? It sounds wrong to me but that was what CRA just told me.
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Old 02-19-2010, 05:30 PM   #1095
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Re: Canadian Online Poker Tax Thread

If it is the same legal entity, I would say you do CCA as if there was no ownership change.

If the legal entity changed, then what CRA says would be correct.
The old entity would be entitled to full CCA even for a partial year and the
new entity would also get to claim CCA, albeit limited by the 1/2 year rule.

Since the legal entity appears to have changed, they may have gotten it right.
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Old 02-27-2010, 02:15 AM   #1096
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
Even telling the truth can get your accounts closed if the story is odd and they don't believe you (happened to me a few years back) I think the best way to deal with large ash transactions is just to slowly build a cash buffer. Depending on your lifestyle keep $10k, $50k, $100k whatever is appropriate in cash and then if you spend some of it start replenishing it.
Well, the main reason I was asking is that I'm 18, and while the sites say thats how old you have to be, gambling age is 19 here, and I really don't know how all that stuff works. I've been searching google, but can't really find much info.
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Old 02-27-2010, 05:15 AM   #1097
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by CxF View Post
Well, the main reason I was asking is that I'm 18, and while the sites say thats how old you have to be, gambling age is 19 here, and I really don't know how all that stuff works. I've been searching google, but can't really find much info.
18???

SERIOUSLY...GO OUT TO THE BAR EVERY FRIDAY AND SATURDAY NIGHT FOR THE NEXT 3 YEARS AND BANG EVERY BROAD YOU CAN...SERIOUSLY...ONLINE POKER CAN WAIT
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Old 03-01-2010, 01:00 PM   #1098
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Re: Canadian Online Poker Tax Thread

Question related to corporations and dividends.

If I were to invest in a corporation (company A), and also own a holding company (Company B), would there be any tax advantages in having the holding company (B) own the interest in the corporation (A) instead of me directly? I would earn returns on my investment in A through dividends.

I'm guessing this would have to do with inter-company dividend tax policy. Any information regarding this would be great.
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Old 03-01-2010, 02:29 PM   #1099
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Re: Canadian Online Poker Tax Thread

Intercorporate dividends are deductible to the recipient corporation, but there is Part IV tax to consider. Part IV tax is a refundable tax that aims to withhold the personal level income tax that would be assessable on the intercorporate dividends if received personally. Whether Part IV tax is payable depends on whether the two corporations are "connected" within the meaning of the Income Tax Act (roughly speaking, if Corporation B owns at least 10% of the shares of Corporation A, then Part IV tax will not be payable).
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Old 03-02-2010, 04:38 PM   #1100
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Re: Canadian Online Poker Tax Thread

I thought I might find some good information here, although it doesnt exactly apply to Canadian taxes.

I'm Canadian and won $50k last year at wsop. I'm going a 'certifying acceptance agent for the IRS' to recover the $15,000 they withheld from from my winnings.

They want to charge me $1250 (their cap, they usually charge 25%), to aquire my US tax number and do all the paperwork. Does this sounds excessive or is it standard?

Also, do I have to mention any of these winnings to my accountant here when I file my Canadian taxes?
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