Tax agency obtains 'jeopardy order' for debt from Downton Abbey-loving billionaire
CBC
Canada's tax agency has obtained an order to seize debts owed by a Chinese billionaire whose love of Downton Abbey inspired him to pay more than $11 million for an iconic Vancouver mansion in the same year he claimed income of just $9,424.
According to a federal court judgment issued last month, the Canada Revenue Agency sought the so-called "jeopardy order" to collect $770,710 against the future sale of Mingfei Zhao's home because the 64-year-old has left Canada and appears to be in the process of trying to sell the only asset he has left in this country.
Zhao bought the 14,000-square foot Tudor-style property in 2014 to much fanfare, vowing to return the building to its original glory a century earlier when "the Rosemary" — named after the daughter of a liquor tycoon — was considered the grandest home ever built in Vancouver.
But according to the court documents, Zhao declared income of less than $10,000 in 2014 and $38,161 in 2015 — amounts CRA auditors concluded were "not sufficient" to support his purchase of real estate and monthly mortgage payments of $8,699.
"Lifestyle does not match reported income," a CRA auditor claimed in a lengthy affidavit obtained by the CBC.
The tax agency reassessed Zhao's income for the two years in question at a combined $1.28 million — levelling a claim against him for unpaid income tax, which has risen to more than $770,000 with interest and penalties.
Zhao spoke with the CBC in 2016 about his plans for the Rosemary.
He described himself as a retired property developer from Beijing who made his first fortune in flax and grains before moving on to real estate. Zhao immigrated to Canada in September 2014, and his tax returns identify him as divorced.
Zhao told CBC he was sinking millions into an upgrade of the 12-bedroom, 12-bathroom mansion, which features an arched bridge connecting the main building to a carriage house.
Speaking through a Mandarin translator, Zhao said he fell in love with the Rosemary at first sight.
"I liked it because I was watching Downton Abbey at the time," Zhao said.
The billionaire said he was determined to shatter the stereotype that people from China are serial destroyers of older properties: "I want to protect and recover this house to make it stand here another 100 years."
Zhao has filed notices of objection to fight the tax penalty assessed by the CRA, which would normally mean that the agency would not be able to come for his money until after an appeal has been determined.
But the federal Income Tax Act allows the CRA to ask a judge to order payment when "the collection of all or any part of an amount assessed in respect of a taxpayer would be jeopardized by a delay in the collection of that amount."
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