UK rental income tax
#1
Forum Regular
Thread Starter
Joined: Aug 2007
Location: London
Posts: 164
UK rental income tax
Hi there
If i receive rental income from a house in the UK while living in Canada, do i ever have the option of paying the tax in the UK or here in Canada? Obviously it falls below the personal allowance in the UK but added to my salary it's taxed at a much higher rate. Thanks
If i receive rental income from a house in the UK while living in Canada, do i ever have the option of paying the tax in the UK or here in Canada? Obviously it falls below the personal allowance in the UK but added to my salary it's taxed at a much higher rate. Thanks
#2
Joined: Sep 2008
Posts: 12,830
Re: UK rental income tax
Hi there
If i receive rental income from a house in the UK while living in Canada, do i ever have the option of paying the tax in the UK or here in Canada? Obviously it falls below the personal allowance in the UK but added to my salary it's taxed at a much higher rate. Thanks
If i receive rental income from a house in the UK while living in Canada, do i ever have the option of paying the tax in the UK or here in Canada? Obviously it falls below the personal allowance in the UK but added to my salary it's taxed at a much higher rate. Thanks
You also need to file a T1135
Rental income Line 126 - Net Line 160 - Gross
#3
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Joined: Aug 2007
Location: London
Posts: 164
Re: UK rental income tax
Thanks I thought not. Ive been filing for a couple of years now but wondered if there was a way to lower my tax bill as it's shot up this year even though my rental income only went up a little bit.
#4
Re: UK rental income tax
Do you make RRSP contributions according to your allowance and do you report expenses that you incur because of renting?
Yes don't forget T1135 if you need to file it.
Yes don't forget T1135 if you need to file it.
#5
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Joined: Jan 2008
Location: Calgary, Canada
Posts: 75
Re: UK rental income tax
You will be registered in the UK as a non resident landlord presumably? If you aren't then you should be because you need to file a UK tax return each year to prove that you paid the tax due to Canada revenue. The only way you could pay UK tax on it is if you told HMRC you were living in the UK still, which would be a lie, and the only way you would get your 10k tax free allowance is if you didn't declare your Canadian income, which is also a lie. So keep doing it the way you are and make sure you file a UK return.
#6
Re: UK rental income tax
If you're UK non resident you don't pay tax on your non UK income.
https://www.gov.uk/tax-foreign-income/overview
https://www.gov.uk/tax-foreign-income/overview
#7
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Joined: Jan 2008
Location: Calgary, Canada
Posts: 75
Re: UK rental income tax
If you're UK non resident you don't pay tax on your non UK income.
https://www.gov.uk/tax-foreign-income/overview
https://www.gov.uk/tax-foreign-income/overview
He's talking about whether he can pay his UK rental income tax in the UK or Canada, that is all and the answer is you pay it to the country you are tax resident in, so for him, that's Canada.
#8
Re: UK rental income tax
Yes exactly.
If you're non UK resident and you live in Canada, you pay tax on your non UK income (i.e. your Canadian income) in Canada (to the CRA), not to HMRC. But you have to declare all your (worldwide) income to the CRA if you're Canadian tax resident. On your HMRC return (if you have to file one) you declare your UK income. That's what I've done anyway!
https://www.gov.uk/tax-foreign-income/residence
If you're non UK resident and you live in Canada, you pay tax on your non UK income (i.e. your Canadian income) in Canada (to the CRA), not to HMRC. But you have to declare all your (worldwide) income to the CRA if you're Canadian tax resident. On your HMRC return (if you have to file one) you declare your UK income. That's what I've done anyway!
https://www.gov.uk/tax-foreign-income/residence
Last edited by Snowy560; Apr 10th 2017 at 3:40 am.
#9
Just Joined
Joined: Nov 2017
Posts: 1
Re: UK rental income tax
Yes exactly.
If you're non UK resident and you live in Canada, you pay tax on your non UK income (i.e. your Canadian income) in Canada (to the CRA), not to HMRC. But you have to declare all your (worldwide) income to the CRA if you're Canadian tax resident. On your HMRC return (if you have to file one) you declare your UK income. That's what I've done anyway!
If you're non UK resident and you live in Canada, you pay tax on your non UK income (i.e. your Canadian income) in Canada (to the CRA), not to HMRC. But you have to declare all your (worldwide) income to the CRA if you're Canadian tax resident. On your HMRC return (if you have to file one) you declare your UK income. That's what I've done anyway!
#10
Joined: Sep 2008
Posts: 12,830
Re: UK rental income tax
From what Snowy says and looking at the link he provided (from HMRC) it appears that you pay your UK tax on income here in the UK and then you pay your tax on income earned in Canada to the CRA. I guess my question would be - does the CRA then ask you for the difference in tax, i.e. the higher amount, because in the UK you would have a personal allowance of say 10k and this cuts the tax down considerably. Would the CRA then ask for the rest?
All world income must be reported on a to CRA. Your global income is assessed and tax calculated, minus the claimed tax credit (if allowed), the balance is what you owe. Combined incomes are what determines the tax band you are in. https://www.canada.ca/en/financial-c...uebec-2/5.html