CRA net worth audit — do I need an adviser, or can I do it alone?
Some of it, yes — and we will say so on the call if that is the honest answer. The parts that are worth paying for are the ones where a missed election, a missed deadline or an unverified threshold costs more than the fee: the defence is a documented trail for non-income receipts: gifts, inheritances, loans, transfers of your own funds from abroad, and asset sales.
What if I have already filed and got it wrong?
That is a common starting point. We re-derive the position, identify whether an amendment or a disclosure route is the right vehicle, and tell you which one preserves the relief that is still available. The order matters more than the speed.
How long will it take?
It depends on the documents rather than on us. Once the pack is complete most filings turn around inside a fortnight; anything that needs a certificate from a tax authority runs on that authority's timetable, which we tell you at the start rather than at the end.
What is a net worth audit and why am I getting one?
A net-worth audit does not examine your return in the ordinary way. It reconstructs what you must have earned from the change in your assets over a period, adding what you spent and comparing the result with what you declared. Anything left over is treated as income until you show what it was. Auditors reach for the method when they think the books do not tell the whole story, or when deposits look large beside the reported income. Cross-border families are over-represented in this work for an unremarkable reason: money moving between countries within a family is ordinary, and almost never documented at the time.
The CRA says my deposits are income but they were gifts. What do I do?
Document them, one receipt at a time. In a net-worth reconstruction the burden falls on you in practice, because the method starts from the assumption that an unexplained increase is income. A gift is proved by the chain rather than by the assertion: where the money sat before it moved, whose account it left, the instruction that sent it, and what the donor's own position shows about having it to give. A letter from a relative, written years afterwards, carries far less weight than a remittance record and the donor's bank statement covering the same date.
How do I prove money sent by my parents overseas was not income?
By building the evidence from both ends. On the sending side: the account the funds came from, the balance history showing they existed before the transfer, and where relevant the sale, pension or savings that produced them. On the receiving side: the credit into your account, matched by date and amount, and the absence of any service or goods provided in return. Where the funds passed through an intermediary or a money changer, that step needs its own paper, because it is the point at which most trails break. We work the chain backwards from the deposit the auditor has picked out.
Do I really have to explain every single deposit?
Every deposit the reconstruction relies on, yes. That is less onerous than it sounds once the accounts are organised, because most deposits fall into a small number of patterns — salary, transfers between your own accounts, reimbursements, family support — and a pattern can be evidenced once and applied across the period. The ones that need individual treatment are the large and the irregular. What you should not do is explain a few, leave the rest, and hope the method softens. An unaddressed receipt stays in the computation as income.
My spouse's accounts were included in the CRA's calculation. Is that normal?
It is common, because the method looks at the household's assets when family finances are mingled, and in many cross-border households they are. The response is to show whose money is whose. That means tracing each account to the person who funded it, identifying income already taxed in the other spouse's hands, and separating joint holdings that exist for convenience from genuinely shared funds. Where one spouse earned abroad and remitted here, the foreign earnings record does the work. Accepting the combined picture without separating it is how income can end up counted in the wrong hands.
What records should I keep when I bring money into Canada?
Enough to answer three questions years later: where did this money come from, whose was it, and why did it move. In practice that is the statement showing the funds abroad before the transfer, the transfer instruction or remittance advice, the credit on this side, and something establishing the original source — a sale deed, an employment record, estate papers, a loan agreement. Keep them together, by transfer, rather than filed by year. The cost of keeping them is nothing. The cost of rebuilding the same trail under audit, from foreign institutions that answer slowly, is the largest part of what a defence costs.
What happens if I have not filed for several years?
Missed years are handled as one package, not one at a time, because the route chosen for the first year determines the relief available for the rest. Each country has a disclosure or relief programme with its own conditions, and entering the right one — before the authority contacts you — is usually what keeps penalties down. Filing quietly outside a programme forfeits that protection. See catching up on missed returns.
Is moving money between my own accounts in two countries taxable?
Moving your own capital between your own accounts is not itself income, so the transfer is not what creates tax. What can create tax or reporting is the income the money earned before it moved, a foreign-exchange gain on certain holdings, and the reporting obligations the balances themselves trigger — foreign account and asset reports keyed to balances rather than income. Remittances out of some countries also need certification before the bank will send them. See foreign account reporting.
