Aviator

Still do. If you want to get a private license, there are lots of flight schools here that can help. Cost is about half of that in the UK. ON is not as mountainous as BC, but still some interesting flying. If you need any help, feel free to ask.

If you get the chance to do an accelerated course, i.e. do the license over a couple of intense weeks, by and far the best way to do it. If you want to start reading:

http://www.aviationpublishers.com/fgu.html


http://www.tc.gc.ca/eng/civilaviatio...-menu-1986.htm

mardyarse

right O "Guv'nor" (cringe) then let me know what your British "contacts" come up with, let me think??? that'll be exactly what I've already told him FFS! Honestly sometimes I wonder why I even bother.

mardyarse

You must not have any ties to Canada (ie: owning a house since 2007) will be deemed by the Canadian Tax Man to be a Tax Resident. If you want to 100% guarantee that you will keep all your lump sum to yourself you must not have any ties. Do you get it now? Please PM me if you need to. I just want to make sure you get it so you can start tax planning now for the lump sum.

debbiem

quick q as i'm nosy - - do you currently file a non-res tax return as a homeowner? and your wife files a resident tax-return? or is the house in just her name?

i understand the theory that if you are brit mil you file as a non-res, but in our case, as we were posted here, owned property (even though we didn't live in it) and i worked on the canadian net, we had to file some quite convoluted tax returns (and as we landed during that period, despite being brit mil, that included a resident tax return. this was waaaaaaaay before we had decided to last tour. we could have gone back to the uk.)

tax residency isn't the same thing as immigration status by a long chalk. even as brit mil.

owning property is what catches most people out in terms of tax-ties tbh. as well as your wife and kids being ordinarily resident here.

we currently have the cash in the bank waiting for the next tax filing.

it isn't going to be pretty. at all.

I have no idea how the citizenship thing will impact. I just know that in our case, the fact we had PR and owned a house was enough to put us in the 'tax-resident' bracket, whether or not we were going to get posted back to the uk and were only there because the miltary sent us....

stay in the uk for payment of gratuity (ours took nearly 3 weeks after last day of service by the way, not a couple of days) and clarify your situation wrt to wife and family. It's not looking terribly hopeful from where I'm sitting, but it's your best chance.

YJMalmsteen

Hi Debbie,

Although we have a house in Canada, I am still serving in the British Army, have never lived in Canada and am obviously a UK tax payer. We bought the house in 2007 and are currently renting it out.

The fact that I hold Canadian citizenship is irrelevant I think as I am also obviously British and have just paid my 30 years 'ticket' for NHS/ pension!!

The obvious answer for us is to stay in Uk until after i get the gratuity and then move over.

Ta!!

mardyarse

Ok so you didn't acknowledge my other posts and obviously still don't get what you're being told.

The situation is this: you own property in Canada (irrelevant that you haven't lived in it) and have rented it out. Thus receiving a Canadian income. You are deemed to be a Canadian Tax Resident when you receive your lump sum. You don't seem to be understanding that this is your fault for not making the relevant enquiries about a tax system into which you now wish to emigrate to. Harsh this may sound but there is no way to dance around it!

The only reason why others won't be losing their lump sum is they made the choice to wait until they had received it before setting up their new life. You jumped the gun to your disadvantage.

I would seek legal advice now and it may be that you have to sell your property in Canada before receiving the lump sum to avoid paying tax. However, I think you said earlier your wife is already a landed immigrant. This doesn't look good for you but you have now got time to rectify it, although you may just choose to ignore this advice.

debbiem

no, if the house is rented out and he is currently filing a non-res tax retunr on it, he does not live in canada and neither does his wife or family, and they are still earning and paying uk tax when the gratuity hits the bank (whilst they are still living in the uk) they are home and dry.

they can file a non-res tax return for the income on the house up until the date they arrive in the country, and then file res return for the rest of the year (it makes for an interesting first tax season, but get someone to do it for you - well worth the money).

that's fine then. my apols, i was under the impression that your wife and kids would be/ are living in the house at the point of gratuity payment and you would be in the uk.

my mistake - misread.

yep, just all stay in the uk until gratuity done and dusted, as mardy did.

(did you note the point about pension btw?)

no drama at all.

debbiem

you are both filing non-res tax returns annually though to canada, yes? (just checking!)

JonboyE

It may not be necessary to sell the house. As long as it is rented out to tenants (not friends or family) with a proper rental agreement and at a fair market rent then the house is not available for the poster's use and is therefore not the significant residential tie an available home would be. Also, the fact that his wife is a PR does not necessarily make him tax-resident here. If she is living with him in the UK or on a British Forces base elsewhere in the world they could both be tax-resident in the UK.

It comes down to the balance of facts. Both of these factors muddy the water somewhat but as long as the poster can demonstrate stronger residential ties to the UK than Canada up to the time he receives his gratuity he should be OK. I think we are all agreed that these stronger residential ties to the UK means living there.

I also agree with you about taking some professional advice. When the issue is not completely clear cut he should make sure all his ducks are correctly aligned.

debbiem

mardy - his wife has PR but is still not tax-resident. she's a tax resident of the uk, they both are. immigration status and tax status are completely different. they file non-res tax returns on their rental income, even though she has pr. she isn't deemed to be tax-resident until she actually moves to canada and establishes residential ties. (residential ties are different to just owning property - kids at school, jobs in uk all point to 'residence' in uk, whatever the immigration status is)

the house is just an aside if it's rented out legitimately, and is already being dealt with through non-res tax returns.

mardyarse

Absolutely, I hear what you are saying and agree. Personally myself and OH are not risk takers, certainly when it comes to the tax man and lump sums. Maybe we were over cautious but the advice from lawyers and accountants was to be firmly tax residents of the UK where the lump sum is guaranteed to be tax free and not to give even a 1% chance of any other interpretation.

agr

Am I reading this correctly: you have received gratuity whilst in Canada and are waiting to see what tax is assessed when you submit your next return?

I ask because we have been discussing military retirement tax hygiene in this forum for at least 4 years and I don't recall anyone ever saying that they have actually paid tax on a gratuity. So you could be an important test case for this audience.

I presume you won't go down without a fight? That you will make the most audacious case you can? Quote the tie-breaker clause of the tax treaty? Make the case that the gratuity becomes payable on the last day of service, and that any delay in receiving it is merely administrative? Make the case that the gratuity is part and parcel of military service, which trumps other tax residency criteria? I doubt any of these would work in court, but you might get lucky and have your return assessed by someone who doesn't think too forensically. It's probably worth getting some professional help too?

debbiem

Well, we'll do all we can, obviously.

All ideas welcome. but essentially, yeeeeeeees.

and I think I've been discussing it on here for four years, too. So you'd think I'd have a plan by now, really.

We were never entirely certain that our PR would be granted (we have a child with cerebral palsy) so it was all a bit theoretical. Circumstances mean that we are exactly in that boat though.

In our case there was never any plausible way we could extricate ourselves from Canadian tax residence criteria though, so we didn't really have much option. Don't really want to go into details on open board though!

I will be sure to let y'all know what happens. <gulp>

CanuckJock

Well if this topic has been discussed for over 4 years, it was well below my radar

My current plans are to leave HMF in a couple years and, OIC Household willing, we'll move across. Now, my end of service should be at the end of the year but, due to timings with schools, we will most likely move across in the summer. Not a huge problem as I can probably stack a bit of Annual Leave and use Resettlement and Terminal Leave such that I leave uniform in Aug, but leave the Service in Dec. So far so good.

When I am on leave I am obviously still serving, albeit on resettlement activities, etc and being paid and taxed in the UK. Concurrently, the family moves across and enters Canada thereafter obtaining house, school, doctor and other trappings of residency. Now, the way I have viewed things was that because my OH and children will be able to enter and settle without me - they become residents whilst I am still serving, but I am a non-resident.

My plan (& I will definitely make the effort to get proper advice) would be to return to the UK before the end of my service (pre-lump sum/commutation) and 'officially' return a week or so later with tax free dosh in hand.

But, I have a feeling that it can't be as simple as that...

JonboyE

I have prepared returns for clients who had a tax-free lump sum from a British civil service pension scheme. We treated the lump sum as pension income so it could be split between spouses to minimize overall tax, and claimed the pension amount. The overall tax to pay was less than expected.

For ex-military is the gratuity in the nature of an advance on your pension? Could it be commuted into a higher pension if you don't take it? If so, I think it is reasonable to call it pension income. However, if it more akin to employment income this may not be an option. Retiring allowances in Canada are usually considered as employment income.