There was a time when it was possible to substantially reduce, or even eliminate your Canadian tax liability by earning your income in an offshore company, or offshore trust – and depositing the proceeds in an offshore bank account. Unfortunately, new tax rules enable the CRA to claw back taxes that would otherwise have been avoided by using such offshore structures.
However, contrary to what some believe, offshore companies, offshore trusts, offshore foundations and offshore bank accounts can still be highly useful to Canadians.
There are many different combinations of offshore structure that can provide asset protection for Canadian residents and, when properly structured, legitimately reduce Canadian taxes payable. It is entirely proper to structure an offshore corporation in between a Canadian corporation and an overseas market, and use transfer pricing to build and retain a nest egg offshore in a tax free locale. Indeed the Organisation of Economic Co-operation and Development (OECD) has specific, generally accepted guidelines on structuring such transaction.
Offshore trusts remain useful, for instance, a grandparent overseas can provide tax-free amounts to children and grandchildren in Canada by means of a ‘Granny Trust. Similarly, properly established Offshore Foundations can be used to provide both asset protection and tax free funds. Offshore bank accounts are entirely proper for Canadians to utilize for any number of reasons – mainly in relation to cross border trading activities. They could also be used simply for asset protection purposes, provided that proper disclosure is made to the CRA.
Offshore structuring using offshore trusts, offshore foundations, offshore corporations and offshore bank accounts in tax havens are still very much vehicles that may be successfully utilized by Canadians. Although the structuring of them has become much more complicated, expert legal help is readily available.
Andrew Rogerson has substantial experience in the offshore world, particularly in Caribbean tax savings and the Channel Islands. He advises regularly on establishment and maintenance of entirely legitimate structures for Canadians seeking asset protection and income tax reduction.
We have a member of the team permanently resident in Dubai; and Andrew Rogerson visits Dubai every two months to serve High Net Worth (HNWI) and Ultra High Net Worth Individual (UHNWI) clients.
Rogerson Law Group provides asset protection and offshore tax haven services in the entire GTA including Toronto, Scarborough, Mississauga, Vaughan, Brampton, Richmond Hill, Etobicoke, and Barrie and surrounding areas with offices located in downtown Toronto, Barrie, and an associated office Ottawa.
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