joepublic

.........and 3

bielbs

Hi Amanda

if you email [email protected] they will tell you all you need to know, apply in plenty of time as they take ages, if you need any further info the feel free to PM me

petesdragon

Some info for anyone needing a police certificate from Gib, it cost £5 and you need to send a certified copy of your passport main page, you can pay by cheque or cash, I am going to do this in a couple of weeks so will post on time taken

joepublic

I would be more than happy if you're right, however, Section 16 of the attached document (see quote below) seems to suggest otherwise...

In addition, the CCRA considers that where an individual entering Canada applies for and obtains landed immigrant status and provincial health coverage, these ties will usually constitute significant residential ties with Canada. Thus, except in exceptional circumstances, where landed immigrant status and provincial health coverage have been acquired, the individual will be determined to be resident in Canada.

JonboyE

The point is that you can only join a provincial health care scheme if you are resident in the province (the same applies to a driver's license). So, to claim that your are a PR and have a provincial driver's license/provincial medical coverage but are not resident for tax purposes is not credible.

Just having PR status does not, in itself, mean that you are automatically tax resident in Canada.

agr

I don't see the contradiction. I was saying 'I'm not a tax resident if I land as PR but don't get health coverage' and your quote says 'You are a tax resident if you land as PR and get health coverage'. (In fact, my interpretation was based on the paragraph you have quoted).

joepublic

So as long as we don't do anything else apart from 'land' (and then go back to UK again) we'll be OK?

I expect to have a PR offer more than a year before I retire. To that end I will have to land within a year of having the medical or the offer will expire. My intention was to land and then go straight home until the gratuity hits the bank. From what you're saying this will be OK with the Canadian Tax Man and I won't get hammered.

marcustandy

From my own personal point of view, it was too much of a risk to land before the gratuity was paid, without a firm answer one way or the other. Combine that with the latest difficulties in getting an LMO, and that's why our Canada plans have all but been binned.

BTW, that's also the reason I ain't somewhere over the Atlantic right now (flight left at 1230hrs today) heading for my two month 'recce'. I'll just use the time for some Euro-touring on my bike.

agr

Well, I speak with no authority as a tax expert, but that was the decision I made for myself. My tax hygiene was impeccable! It was a bit frustrating because I wanted to get on with the admin, buy a house etc, but it all had to wait for a year until I was clear of the Service and came to settle.
My confidence-building fallback was the tie-breaker clause in the UK-CA tax treaty, which says essentially that in the event of a tie, tax residency lies where the strongest personal and financial ties are. I always made sure I could demonstrate that the UK was my financial centre of gravity until the day I settled.

kazbob

Greetings Joe

I am in the Navy and we are in the same boat (no pun intended). Hopefully we will get PR very soon but I still have 2 1/2 years to serve. As far as I am aware, as long as you are a British tax payer (ie tax resident in UK) then you don't declare anything to the Canadians. So if you land whilst serving, return to UK, go outside recieve your Gratuity then emigrate you don't declare anything until after you emigrate. This way you avoid tax.

I on the other hand am going to throw a cat in amongst the pigeons. Next year my wife and kids are going out to settle and I shall see out my time. As far as we are aware my wife doesn't need to declare my income, and as I am tax resident in the UK I don't declare anything to Canada until after I leave, I then take my gratuity and land. Friends of ours have done just done this (he was employed in Canada whilst she served out her time) We are monitoring the situation and will report back what we find out.

Cheers now!

Bob

debbiem

doesn't para 24 apply?
...in that, you are 'ordinarily resident' in the UK for tax purposes as a member of HM Forces? The rest of the article is very clear that CF members wherever they are in the world are 'ordinarily resident' in Canada for tax purposes, so it would seem to be pointless to argue that brit mil are any different?

(I'm with kazbob lol)

Who's got a copy of the tax treaty between Canada and UK? anyone?

We're pretty much stuffed anyway I think lol, but it would be interesting to find out. I do know a couple of people who have left the service from Canada with no discernable return to the UK, so I'll def be digging them up over the next year and asking them what happened about their gratuity...

I still have to work out whether living in Canada whilst serving means we pay res or non-res tax on the (Canadian) house we own but don't live in... any ideas?

JonboyE

IMO opinion you are both right.

joepublic will have nothing to worry about. If he "lands" to activate his PR and goes straight back to the UK he will not be considered as a tax resident in Canada. The cleanest way is to get the gratuity into your bank in the UK, then up sticks and move your home and family over. The income you received up to the day before you move to Canada to live is nothing to do with Canadian tax man.

In some ways it is a bit moot. As long as you are sure you have followed the rules correctly you will put the date you moved permanently to Canada on your first Canadian tax return, and this will be a date after you received your gratuity. It is highly unlikely the CRA will question it unless you have come to their attention in some way before this (i.e. have had non-resident income, such as interest on savings, in Canada). However, you cannot assume that the UK and Canada will not share information so if there is any doubt in your mind you should make sure that you have proper evidence that you were tax resident in the UK when you received your lump sum.

JonboyE

If you are in the British armed forces you are a tax resident of the UK regardless. If you receive your gratuity while you are still serving then all well and good.

However, when tax residency is in question one of the most persuasive factors the tax people look at is where does your family live. If your family have already set up a home in Canada where you can go to live it is very likely you will be treated as a Canadian tax resident from the day you are discharged.

I strongly recommend you get some advice from a good Canadian tax accountant.

JonboyE

http://www.fin.gc.ca/treaties-conventions/UK_-eng.asp

agr

..and this is the crux of the problem. The gratuity is paid 10-28 days after discharge. The pension award letter states that it is awarded on the first day of civilian life (not the last day of service). It would be a churlish CRA that laid claim to tax on a gratuity paid in return for many years of service to a foreign government, but you never know..

There is always the option to seek an advance determination from the CRA. But one of my rules in life is don't ask a question unless you've got a plan for either of the possible answers!