Hi everybody,

normally this forum is great for finding answers to my questions but this time the question I have is quite specific and I've not found anyone else who's posed it before so here goes.

My wife and I officially landed in Vancouver in September 2008. At that time we completed the immigration process, enjoyed a great 2 week holiday and then headed back to the UK to tidy up all our loose ends. We continued to work and live in the UK until June 2009 at which point we returned to Vancouver and began our new life here.

Last week we went to H+R Block for help with our 2009 tax return. We declared all our UK earnings for 2009 (Jan – May) and also declared the income tax we’d already paid on this amount in the UK. H+R Block included our world earnings in the tax return and entered the tax we had paid into their software but the end result was that the tax summary listed our total income for the year but only listed the tax paid in Canada as per our T4’s. The result of this is that we have got an enormous tax bill to pay, the majority of which seems to be because of our declared earnings from the UK.

When I asked H+R Block about this they said that we have to pay it, Revenue Canada will then figure out that we’ve paid income tax on some of that income twice and arrange a refund. I can’t say I totally believe them. Has anyone here been through a similar situation and received a rebate after paying double tax? It’ll certainly set our minds at ease if anyone can confirm that this is the way it works.

By way of a follow up question, the H+R Block representative took the details of our gross UK income and the tax paid but made no note of the usual deductions such as National Insurance and pension contributions. Should these have been taken into consideration also?

Many Thanks.

H+R block.....<shudders> another fine mess.

Firstly, you are not TAX resident just because you activated you PR, that only happens AFTER you settle here permanently.

Secondly, you cant get an enormous tax bill on something you have already paid tax on in the UK due to the tax treaties. You should have international tax credits to apply to any canadian thats calculated, and the difference between canadian tax rates and UK ones is not that great.

You are right not to trust H+R, you arent the first person to assume that because the are large and well known that they know their arse from their elbow. My impression is they hire a lot of short term empoyees for tax season and train them with the basics, but throw something unusual like foreign residence at them and some of them struggle.

Maybe one of the tax experts will come along here soon and give some decent advice.

My non-expert impression is that (like me actually) you were non-resident until June. So, you only need to declare income from when you became resident. If you have none from the UK after this point, it will only be your Canadian income that you will be declaring.
I would do your own return, pretty simple with one of the online programs.

If I go back to H+R and tell them to do it properly do you think they'll do it at no additional charge? Considering the fortune we forked out for their service I'd prefer not to have to resort to doing it myself. Also they submitted an eFile on the day which may complicate things.

By the way, thanks for your quick responses.

H+R Block hire monkeys to input numbers into a computer - they don't understand anything out of the norm.

You should only declare worldwide income from the date you arrived to live here permanently - i.e in June. Anything before that should be omitted from your Canadian return. Tax bands and allowances will be all be prorated based on your arrival date in June so your first return will be a little more complicated.

They should do. I assume this is your first tax return in Canada? Did they file your return with the International tax office? If not then they have fecked up good and proper...

Curious, did they put a date on the front page where it asks if you became resident or non-resident during the year? This is mine. This would seem to be rather key to the whole thing and to what CRA might make of it. If they didnt put info here then it might be quite complicated I would think....
BTW I used Quick Tax which does pro-rate allowances.

Information about your residence
Province or territory of residence on December 31, 2009:
Ontario
Province/territory where you currently reside if not the same as your mailing address above:
Province or territory of self-employment:
If you became or ceased to be a resident of Canada in 2009, give the date of: entry 05/30 or departure:

We landed in Canada Feb 09 and have just submitted our first tax return. We were advised to get an accountant for the first time because with it being your first tax return it has to be submitted on paper and NOT electronically plus this way you know it's done properly. This only cost us $60 and to be honest it's the best $60 we've spent you only pay tax from the day you offically landed for good and not when you got your PR card.

It wouldn't be filed with the International Office as they were resident at the end of the year. International is only for non-resident.

Just to clarify, I used the online program and then printed and mailed a hard paper copy. Depending on circumstances its not hard.

I've no idea who they filed it with. We'd hoped they'd spend a bit of time explaining stuff to us but that didn't really happen. We were as clueless coming out of their office as we were going in, in fact, the feeling I had was that I'd just had my dinner money stolen by one of the bigger kids!

They didn't put a date on stating we became resident in 2009 because they said our original arrival in September 2008 meant that was our date of residency. That seems to be the crux of the problem.

Yes our accountant did the same but with us still having property in the UK we wanted to make sure we didn't miss anything.

I think I should have come here for advice first, it would have saved a lot of worry and money. We were stung for $360.

Ouch!! Can't you seek advice from someone independent or is that it?