dinger24

No I do not believe you have been offensive at all on this thread. I have found it informative and useful. It highlights the lack of information through our resettlement, when I asked about Canada I was given 1 A4 piece of paper written by someone who was married to a Canadian lass so his immigration was fairly straight forward, blah blah blah!
I am amazed at how many ex forces I meet in these threads and how many of us are leaving with the intention of moving there.
PS I think we briefly spoke last year reference Opfor hiring a boat, cant remember if it was the RQ main or Tech?

marcustandy

Not me mate, but we have exchanged a few emails etc via Trucknet and/or 'Truckers Abroad who are British' websites.

dinger24

Yes I remember the other sites I just when out in Batus last year I soke to one of the RQMS's thought it might have been yourself!
Anyway no drama's
Need to go the long haired general will be in her element if I dont get my thumb out and get her housework done before she gets home from her work!

LiffyB

News that you really don't want to hear!

Someone has just PM'd me from the NZ forum to tell me that upon moving to NZ your pension and graturity are tax free for the first 4 years! When you leave the UK you inform the tax man that you are emmigrating to NZ and your pension stops being taxed in the UK. Upon arrival in NZ your pension is not taxed for the first 4 years - alongside it seems any other income from outside NZ. There are clauses attached however ie you will not claim family tax credits in NZ.

Mmmmm - something to think about!!!! NZ? Nah - I'd miss the hockey and shovelling copious amounts of snow and snirt in the winter.

Nodoubt someone will come along and tell me otherwise!

petesdragon

So the way around the pay tax on my gratuity problem is to land as PR then leave and use the 2 in 5 year rule, or is this a bit too simple? one of the criteria for taxation is social ties in Canada, does this mean family members in Canada(wifes side), just asking as do'nt really want to pay tax on leaving wedge, so if only way to avoid this is to land after wedge payed in then so be it, would prefer to get the process started and finished so we can just go when my 22 is up, any thoughts?

Mrs Miggins

You will not pay tax on the Gratuity if you are here as a WP or PR holder. A good accountant will argue that it is a gift from a government, which is untaxable. We have been there and got the Tshirt and never paid a penny in tax on the gratuity.

Mrs Miggins x

Almost Canadian

Sorry, but this is wrong. Don't forget, just because you haven't had to pay tax on it yet doesn't mean you won't have to in the future.

It is residential ties to Canada that is key. If you are here on a WP or on PR, how can you reasonably argue that you don't have residential ties to Canada? Your only hope is that CRA never pursue you, if they do, you will need to sue your accountant for negligence because under no circumstances is it a gift from the Government - even saying it aloud sounds ridiculous - no offence intended. I fail to see how your accountant kept a straight face when s/he told you this.

Did you declare it on your tax return (I can't remember whether you have been here long enough to have had to submit one)?

In all seriousness, if he received a large gratuity, I would be worried

agr

I've studied the CRA website and the UK-Canada tax treaty and, although I'm not a tax expert, I've concluded that landed PR status by itself does not confer tax residency. But it gets you close. In my opinion, landing but then refraining from opening bank accounts, starting health insurance, buying or renting a house etc. until after gratuity is paid should be ok.

The Treaty has a tie-breaker clause but I would not want to rely on it alone. I'm retaining a quarter until the gratuity's in the bank, because availability of a place of residence is a very strong determining factor.

When the CRA talks about family members, I think it means spouse and dependent children,

Mrs Miggins

I appreciate your feedback, and apologise for not highlighting that we were paid our gratuity before we landed here....

Yes we did declare it on our Tax Return and the accountants were used KPMG here in Lethbridge, not some back street job. I have to be honest, I feel confident in her assessment of the situation, it was looked at with senior members of the firm, who too assured us of the case, and our file wasn't processed in a run of the mill manner by any stretch when we were finally given our tax return this year. So although I fully respect your view, I will be sleeping well tonight!

Thanks Mrs M x

dexdaw

[QUOTE=agr;6983657]I've studied the CRA website and the UK-Canada tax treaty and, although I'm not a tax expert, I've concluded that landed PR status by itself does not confer tax residency. But it gets you close. In my opinion, landing but then refraining from opening bank accounts, starting health insurance, buying or renting a house etc. until after gratuity is paid should be ok.

As it stands literally all we've done is land. No bank accounts, no house, no family etc. We're intending to move for good after the gratuity has been paid. Hopefully this should pacify the tax man!

Almost Canadian

Noted. You didn't say that in your post though, you said "You will not pay tax on the Gratuity if you are here as a WP or PR holder." - this is the part I didn't agree with.

In your case, you appear to have done the thing that most others have been suggesting to do: Receive your gratuity "outside of Canada" and then move over.

chinook

Interesting reading but still at a loss, does anybody have any suggestions for my particular situation, I am sure I am not alone?

I am serving in Canada, have done my 22 and will bang out at the end of my present tour in just under 3 years time. Now I have a PR and I officially landed in March 2007, I spent a couple of weeks over on a reccie before returning to the UK to demob and wind down etc. Plans then changed as I was offered a posting out here so I obviously took it. Although I am here on a posting I checked my status with the Border staff and I am here on their books notching up my required PR time (711 days I think you need in a 5 year period).

By being posted here I have a bank account, drivers license, savings account and credit card, all things that could be argued prove links to Canada, however I need them for my posting and I pay tax in the UK. I have a house here that I bought awhile ago, I bought it as an investment and it has been rented ever since. More ties to Canada I assume although I declare the rent legally to the UK tax man.

My wife though is a Canadian and my child has Canadian citizenship and at demob point we will be staying, my concern like everybody else's is the gratuity payment being taxed in Canada.

I think one way around it would be to put the savings and house in my wifes name and then at tourex I go back to the UK having previously signed off at a calculated date. I spend my gardening period on someone else's books, before I get criticized having been in this position before I get 22 weeks if planned correctly for the wind down period. Once my cash goes in I then return to Canada. This will be a pain and will screw up my resettlement plans and gardening leave, I would therefore be grateful if someone could either advise otherwise or recommend a good tax specialist or accountant. I am sure there have been numerous personnel who have discharged locally after perhaps last touring at BATUS for example.

Thanks in advance for any positive suggestions.

LiffyB

Hi Chinnock

I have Pm'd you with the suggestion of a name in Stadaconna that may be able to help you.

Liff

agr

You need professional advice on this one. You cannot be a tax resident of Canada whilst employed by the UK government, but once your employment ends that no longer applies. On the face of it with PR status, own residence and dependants in Canada I would think that even returning (alone) to the UK would not prevent you becoming a Canadian tax resident on your first day as a civvy if the CRA were so inclined.
That's why you need professional advice to assess all the untested theories about gifts from government, foreign government pensions etc that you can read on BE. It needs to be someone familiar with the UK-Canada tax treaty. I imagine a lawyer might argue that the gratuity becomes payable on your last day of service, is delayed only by admin, and represents your final remuneration for the UK government employment that kept you from becoming a tax resident hitherto. But I don't know whether that has been tested in court - a professional should.
Most of us can plan with reasonable confidence to manage our tax residency during the transition so as to avoid tax on gratuity. You seem to be much more constrained by circumstances.
Wouldn't it make life simple if indeed there were a case-law precedent that could stop us all fretting about those two weeks between demob and gratuity?

Souvenir

[QUOTE=agr;6997174]those two weeks between demob and gratuity?/QUOTE]

Try retiring from the Canadian Forces pal. When Souvette released in January, it was months before she saw the gratuity or any sign of her pension.

Still, at least here it's possible to move the gratuity out of the taxman's reach.