I received all my pensions from past employments in Singapore before landed in Canada in 1 lump sum this year. Will this sum be deducted from Family Net Income for CCTB?

[durianrambutan]

Under present tax treaty, any such amounts are liable to be taxed at source in Singapore, and exempt from CRA taxes. However, it has to be reported on Line 130 and then be deducted on Line 256.

For Canada Child Tax Benefit (CCTB), the Universal Child Care Benefit (UCCB) is deducted from Line 236 Family Net Income. How about the pensions I received?

[durianrambutan]

Appreciate and thank you for your reply.

CRA calculates the CCTB based on Family Net Income which is Line 236. This year I have to report the lump sum pension received. This makes a big increase on Line 236. I will be not eligible for the CCTB if the lump sum is not excluded from Adjusted Family Net Income when calculating the CCTB. In fact, what I earned falls within low and modest income range only. I would like to find out whether the lump sum will be excluded from the Adjusted Family Net Income.

[TonyC11]

There is nowhere I see on lines 205-235 to deduct the one time pension amount.
Only Registered Plan amounts (examples being transfers into RRSPs) can be deducted.

[durianrambutan]

Please refer to this resource - http://turbotax.intuit.ca/tax-resources/dependant-tax-expenses/canada-child-tax-benefit.jsp regarding Adjusted Family Net Income. It was mentioned that "For purposes of CCTB eligibility, net income may be adjusted to enhance eligibility".  So for a family that receives UCCB (Line 117), Line 236 will be adjusted by excluding this UCCB to calculate the eligibility amount of CCTB. For example, Line 236 Net Income is $30000, and Line 117 UCCB is $2000, the Adjusted Net Income will be $28000. For my case, for example Line 236 Net Income is $80000, and Line 130 Lump Sum Pension is $60000, what will be the Adjusted Net Income that CRA will be using in calculating the CCTB?

[TonyC11]

The adjustment for UCCB is applied automatically to your CCTB eligibility as noted above, assuming you report the UCCB.
( CRA will do it anyway, as they have all your UCCB slip data).

All of the pension income you received while resident in Canada ( either one-time or regular payments) must be reported, regardless of source. It is ALL included in your Net Income line 236 and there is  no deduction prior to that line, unless as I state below you are dealing with registered amounts.  Therefore all this income is taken into account for CCTB purposes ( but not for UCCB).

In the later comments by Delphision, it is noted that you should by tax treaty deduct your pension at line 256, which removes it from Taxable Income line 260, preventing double taxation.
( this affects the tax you will pay, but has no impact on CCTB eligibility).

[durianrambutan]

Thank you for clearing my queries.

[TonyC11 · Accepted solution]

CCTB is not a taxable benefit, and is not reported. It is not part of your Net Income.
UCCB IS a taxable benefit, paid regardless of income. It is not deducted anywhere, and IS part of your Net income.

Your Pension lump some received prior to landing in Canada should be reported as such.
Any income received from invested pension amounts, both prior to and after arriving in Canada , also should be reported, and is not deducted.

[Delphision]

I see this on the CRA website for immigrants:

"For the part of the tax year that you WERE a resident of Canada

You have to report your world income (income from all sources, both inside and outside Canada) earned after becoming a resident of Canada for income tax purposes on your Canadian tax return.

In some cases, pension income from outside of Canada may be exempt from tax in Canada due to a tax treaty, but you must still report the income on your tax return. You can deduct the exempt part on line 256 of your tax return.

If you owned certain properties, other than taxable Canadian properties, while you were a non-resident of Canada, we consider you to have disposed of the properties and to have immediately reacquired them at a cost equal to their fair market value on the date you became a resident of Canada. This is called a deemed acquisition".

What you need to do is to call CRA and find out which pensions and payouts are non-taxable and what tax treaties affect you.  1-800-959-8281

The tax treaty is available here but is rather ambiguous.

http://www.fin.gc.ca/treaties-conventions/Singapore_-eng.asp

[mariaelk77]

According to CRA for immigrants:http://www.cra-arc.gc.ca/newcomers/#whtr

For the part of the tax year that you WERE NOT a resident of Canada

You have to report the following amounts:

• income from employment in Canada or from a business carried on in Canada;
• taxable capital gains from disposing of taxable Canadian property; and
• taxable part of scholarships, bursaries, fellowships, and research grants you received from Canadian sources.

You report world income only after you become a resident of Canada

As you received all the pension before becoming a resident of Canada, you do not report it so it should not affect your net income