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DIY Canada-UK Tax

DIY Canada-UK Tax

Old May 31st 2023, 4:04 pm
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Default DIY Canada-UK Tax

Hi All.

Recently moved to Canada from UK with my wife on a work permit.

We are both working here in Canada and we have rental income from a UK property.

I am starting to look into the Tax situation. My first question is: is it easy to DIY it? or do you really need an accountant?

If DIY is a good option: any good resources for a "step-by-step" guide?

Many Thanks in Advance.
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Old May 31st 2023, 5:34 pm
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Default Re: DIY Canada-UK Tax

Originally Posted by David.Clark613
Hi All.

Recently moved to Canada from UK with my wife on a work permit.

We are both working here in Canada and we have rental income from a UK property.

I am starting to look into the Tax situation. My first question is: is it easy to DIY it? or do you really need an accountant?

If DIY is a good option: any good resources for a "step-by-step" guide?

Many Thanks in Advance.
Lots of people will tell you it's best to use an accountant, believing it's more difficult than it is, and lots will say it's not difficult at all.

I've done it myself for every year I've been here using an on line version (2 or 3 different ones actually) and it's handled rental income (albeit Canadian rather than UK), income splitting, other UK income, sale of a Canadian property, Canadian income and a part year return for the year my wife died.

Some of them have a fixed fee. They all encourage the user to upgrade to a premium level for a higher fee but I never found it necessary. Some are free below a certain income and some invite you pay what you think is worth it.

A suggestion - assuming you've got your rental accounts handy (and bear in mind for Canada it's a Calendar year) - have a look at the on line versions (turbotax and wealthsimpletax are the two main ones of used) and see what you like the look of. Some do it like an interview so no need for step by step.

You can try them, as near to the real thing as you can get, with payment only needed if you actually submit. So you could do a sort of dummy run.

If you came to Canada in 2023 your return isn't due until 2023 has finished. But just to get an idea you could complete for 2022 as if all your dates were a year earlier.

Up to you how far you take it so long as you stop short of submitting it. Anything you don't like the look of try a different one or if you don't like it at all, that's when you know to get someone else on it.
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Old May 31st 2023, 6:31 pm
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Default Re: DIY Canada-UK Tax

We’ve usually done our own too, and found it straightforward - you have to concentrate on getting the exchange rate - in one area, we found Turbotax did it and in another, you have to apply it yourself. But as already suggested, play around with it and it makes sense. We’ve always used Turbotax and it advises you on the best option once you give it the info, for example on pension splitting or claiming for a medical expense.
I suggest you do as we did and set up a spreadsheet to track income, expenses etc - set up the same categories as you’ll submit which you’ll find in the software - we tend to update it a couple of times a year, rather than monthly. If you have it done by the end of December, you’re then just waiting for your Canadian T4s etc which will be with you at the end of February.
Have you got a myCRA account yet? I presume you can open it now - they have to send you a code to access it first, but after that, you use the same sign in details as your bank, which makes it easy. It’s far more informative than the HMRC one and well worth sorting out now if you can.
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Old May 31st 2023, 9:10 pm
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Default Re: DIY Canada-UK Tax

Here's my step by step guide:

1) Set up a CRA (Canada Revenue Agency) MyAccount.
2) Use WealthSimple Tax - https://www.wealthsimple.com/en-ca/tax

Then you can connect your wealthsimple tax account to CRA and pull all the forms that have been submitted and it will populate the tax return for you. Just have to wait until the end of February/beginning of March to make sure all the forms are at the CRA.

Of course this is assuming you're both employed at a company and not working as a contractor or running your own business.

For the rental income you can declare it, if you have any concerns about the rate you can use the bank of canada's exchange rate lookup tool - https://www.bankofcanada.ca/rates/ex...-rates-lookup/

Last edited by CanadaJimmy; May 31st 2023 at 9:16 pm.
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Old Jun 1st 2023, 5:17 pm
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Default Re: DIY Canada-UK Tax

I endorse what others have already said. I tried an accountant in the first year here and found I had to do most of the work providing the figures they used to populate the tax return - different tax years don't help with UK using April to April and Canada a calendar year. I found generating a spreadsheet to capture the figures with automatic calculations where practical to be very helpful. If you use an accountant, make sure they will also cover any follow-up questions you might get from CRA.

Canada: tax treaties - GOV.UK (www.gov.uk) is also worth studying. It took CRA 2 years to tell me my UK income was taxable in Canada - and probably another 2 more years for HMRC to refund it!
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