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Double tax - UK & Canada?

Double tax - UK & Canada?

Old Jan 5th 2013, 1:07 am
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Default Double tax - UK & Canada?

Hi folks,

If you have paid tax on income earned in the UK, is it correct that you need to attach proof of tax already paid in the UK when submitting your Canadian tax return? (I understand this is to prevent double-taxation under the UK-Canada tax treaty).

If so, what proof is acceptable to CRA?

i) Do you have to provide the original letter from HMRC (tax statement?) showing how much tax you have paid?

ii) Or will CRA accept a photocopy of your tax statement?

iii) Or can you print off a page from your Self Assessment online showing how much tax you have paid?

The reason I ask is I am wondering if I would get a Tax statement from HMRC in time to attach to the Canadian tax return by the end of April, if I submit my tax return by mid-January?

If you submit your UK Self Assessment tax return online, does it take longer to get the tax statement from HMRC because you are no longer resident? Does anyone still get their HMRC letters sent to someone in the UK to speed things up (rather than posting to Canada?)

Thanks in advance for any feedback.
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Old Jan 5th 2013, 1:09 am
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Default Re: Double tax - UK & Canada?

Originally Posted by ralphster View Post
Hi folks,

If you have paid tax on income earned in the UK, is it correct that you need to attach proof of tax already paid in the UK when submitting your Canadian tax return? (I understand this is to prevent double-taxation under the UK-Canada tax treaty).

If so, what proof is acceptable to CRA?

i) Do you have to provide the original letter from HMRC (tax statement?) showing how much tax you have paid?

ii) Or will CRA accept a photocopy of your tax statement?

iii) Or can you print off a page from your Self Assessment online showing how much tax you have paid?

The reason I ask is I am wondering if I would get a Tax statement from HMRC in time to attach to the Canadian tax return by the end of April, if I submit my tax return by mid-January?

If you submit your UK Self Assessment tax return online, does it take longer to get the tax statement from HMRC because you are no longer resident? Does anyone still get their HMRC letters sent to someone in the UK to speed things up (rather than posting to Canada?)

Thanks in advance for any feedback.
Amazing what Google can do http://www.cra-arc.gc.ca/tx/ndvdls/t...5/405-eng.html
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Old Jan 5th 2013, 7:01 am
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Default Re: Double tax - UK & Canada?

Thanks Aviator. I was looking for people's personal experience as the info on the link you provided does not specify about what constitutes proof - original letter or a screen shot of your UK Self Asssessment screen. I know that tax authorities can be quite particular in what they accept. Do CRA typically want originals from people's experience?

Has anyone filled their Canadian Tax Return online? Is it like the UK online portal or does everyone send in paper copies?

Also, just wondering how long it typically takes people to get their final tax statement from HMRC after submitting UK return online? Does it take longer once you are resident in Canada?
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Old Jan 5th 2013, 4:35 pm
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Default Re: Double tax - UK & Canada?

Originally Posted by ralphster View Post
Thanks Aviator. I was looking for people's personal experience as the info on the link you provided does not specify about what constitutes proof - original letter or a screen shot of your UK Self Asssessment screen. I know that tax authorities can be quite particular in what they accept. Do CRA typically want originals from people's experience?

Has anyone filled their Canadian Tax Return online? Is it like the UK online portal or does everyone send in paper copies?

Also, just wondering how long it typically takes people to get their final tax statement from HMRC after submitting UK return online? Does it take longer once you are resident in Canada?
Some file paper, some file online. When you file your tax return you fill in the boxes, claim for foreign tax paid and that is all you do. You don't send anything to CRA other than filing your return. If CRA have questions they will also for further documentation.

http://www.cra-arc.gc.ca/E/pub/tp/it270r3/it270r3-e.pdf
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Old Jan 5th 2013, 4:40 pm
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Default Re: Double tax - UK & Canada?

They will want to see your two UK tax returns that cover the Canadian tax year. I.e. for a credit you claim in 2012 they will want to see your 2011/2012 and 2012/2013 UK tax returns. Photocopies and faxes are generally acceptable.

You can estimate what will be on your 2012/2013 tax return and apportion it to April-Dec 2012 if you want to file your Canadian tax return before your UK one.

It is very likely that they will ask to see these so keep them handy. For 2011 the CRA asked for verification of virtually every tax return I filed with a claim for a foreign tax credit.

Most Canadians file tax returns on-line. However, if this is your first return you will have to do a paper return and mail it in.
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Old Jan 6th 2013, 4:18 am
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Default Re: Double tax - UK & Canada?

Originally Posted by ralphster View Post
Hi folks,

If you have paid tax on income earned in the UK, is it correct that you need to attach proof of tax already paid in the UK when submitting your Canadian tax return? (I understand this is to prevent double-taxation under the UK-Canada tax treaty).

If so, what proof is acceptable to CRA?

i) Do you have to provide the original letter from HMRC (tax statement?) showing how much tax you have paid?

ii) Or will CRA accept a photocopy of your tax statement?

iii) Or can you print off a page from your Self Assessment online showing how much tax you have paid?

The reason I ask is I am wondering if I would get a Tax statement from HMRC in time to attach to the Canadian tax return by the end of April, if I submit my tax return by mid-January?

If you submit your UK Self Assessment tax return online, does it take longer to get the tax statement from HMRC because you are no longer resident? Does anyone still get their HMRC letters sent to someone in the UK to speed things up (rather than posting to Canada?)

Thanks in advance for any feedback.
If you're no longer UK resident, you can ask HMRC for relief at source from UK income tax, which zero-rates you for income tax in the UK, and claim a refund of all UK tax paid since your landing date in Canada. You then just pay Canadian income tax on all your earned income, including UK earned income declared on your CRA tax return apportioned for the relevant tax year.

The above is the only way to prevent double taxation in Canada if you are no longer UK resident. I was advised that the CRA Foreign Tax Credit is not appropriate as it is for use in respect of countries that have no reciprocal tax treaty and in any case does not compensate you for all the Canadian tax paid on foreign earned income. Believe me, I learned all this the hard way.

You need to complete this form:

http://www.hmrc.gov.uk/cnr/canada-individual.pdf

Last edited by spooooook; Jan 6th 2013 at 4:21 am.
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