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Maintaining UK Credit History whilst in Canada

Maintaining UK Credit History whilst in Canada

Old Jul 18th 2021, 8:35 am
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Default Maintaining UK Credit History whilst in Canada

Hi Folks,

Has anyone got any tips or practical experience in maintaining UK credit history whilst in Canada? Whilst I believe our move will be permanent I just want to ensure options remain should life change and we decide we want to return to the UK. I plan on keeping our banking accounts open as they will be receiving rental income amongst other things and also some savings accounts. Main focus is credit card accounts that I can keep "alive" buy using them to purchase things for UK friends and family (birthday presents etc) whilst in Canada. I have an alternate UK address that I will supply also to help anchor the accounts in the UK.

Appreciate your feedback,

Thanks
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Old Jul 18th 2021, 10:34 am
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Default Re: Maintaining UK Credit History whilst in Canada

We’ve been here 11 years, in very similar position to you, in that we still have a UK property rented out. We’ve kept certain UK bank accounts, but all are quite happy to accept our Canada address. We’ve registered as Non Resident Landlords etc so pay no UK tax but declare everything here, although OH has to complete a UK tax form every year.
We’ve found it helpful to set up a spreadsheet to record all our non Canada income and expenses - usually in the summer and again at Christmas, we sit down and enter 6 months worth of data which doesn’t take long but it means we’re only waiting for T4 stuff in February and then doing taxes isn't a huge task in March/April. Many people get an adviser to do their taxes but even with the UK component, we find it straightforward now and it’s a good opportunity to review our financial situation. The most complicated bit is application of the exchange rate.
I hadn’t thought specifically about UK credit history but we do use the UK credit card from time to time, and move money around other accounts occasionally.
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Old Jul 18th 2021, 2:30 pm
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Default Re: Maintaining UK Credit History whilst in Canada

We had to give up all bar our HSBC UK credit cards. Seemed it was policy for Barclaycard and MasterCard to only allow cards to work from the country of residence
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Old Jul 18th 2021, 3:44 pm
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Default Re: Maintaining UK Credit History whilst in Canada

Keep in mind not only the tax liability on the income generated, but if the property (together with any other assets in the UK / elsewhere) has a value in excess of $100,000 (you must report to Revenue Canada, though there shouldn't be any tax liability until you sell... i.e. Ensure you get the property valued prior to leaving the UK and taking up residence in Canada, as you are deemed to have disposed of all assets on the day you become resident for tax purposes and any increase in value on final sale may result in a tax liability.

See our wiki for more info - and the official word
https://www.canada.ca/en/revenue-age...nada.html#P111

https://britishexpats.com/wiki/Tax_o...me_from_Canada
https://britishexpats.com/wiki/When_to_sell_UK_house
https://britishexpats.com/wiki/Tax_a...e_UK_to_Canada

Last edited by Siouxie; Jul 18th 2021 at 3:47 pm.
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Old Jul 18th 2021, 8:17 pm
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by Siouxie
if the property (together with any other assets in the UK / elsewhere) has a value in excess of $100,000
For clarity, a T1135 refers to cost, not value. However for new immigrants that cost is fair market value on the day one becomes a tax resident, thereafter (for future years this is the deemed 'cost' and the basis for reporting regardless of whether the asset changes in value or not. Some assets this may cause few problems, some more volatile assets it could become complicated, such as Bitcoin. New immigrants do not need to report on a T1135 in the tax year in which they first become a tax resident. As Siouxie suggested, written valuations stating fair market value on or as near to the day of becoming (before not after) tax resident could prove invaluable. These are not self assessed valuations. They are usually in the currency of where the asset is held, the Bank of Canada rate on the day of taking up residency is the prevailing CAD value.
Due to the penalties for getting it wrong, always worth talking to an accountant, even worth a chat before arriving for those with significant assets. There are many independent accountants, MNP have offices across Canada and may be easier to find from overseas. We used MNP for a while, when our accountant with them set up his own firm, we sought him out and moved to his firm. I am not a Canadian accountant and have no vested interest in whomever one chooses to use. My advice however is always to use a professional, from my experience they save more than they cost.
https://www.canada.ca/en/revenue-age...orm-t1135.html

Last edited by Farmer on a bike; Jul 18th 2021 at 8:20 pm.
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Old Jul 20th 2021, 8:23 am
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by Twitcher1958
We’ve been here 11 years, in very similar position to you, in that we still have a UK property rented out. We’ve kept certain UK bank accounts, but all are quite happy to accept our Canada address. We’ve registered as Non Resident Landlords etc so pay no UK tax but declare everything here, although OH has to complete a UK tax form every year.
We’ve found it helpful to set up a spreadsheet to record all our non Canada income and expenses - usually in the summer and again at Christmas, we sit down and enter 6 months worth of data which doesn’t take long but it means we’re only waiting for T4 stuff in February and then doing taxes isn't a huge task in March/April. Many people get an adviser to do their taxes but even with the UK component, we find it straightforward now and it’s a good opportunity to review our financial situation. The most complicated bit is application of the exchange rate.
I hadn’t thought specifically about UK credit history but we do use the UK credit card from time to time, and move money around other accounts occasionally.
Thanks for the great tips and I shall take these on board:-)
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Old Jul 20th 2021, 8:26 am
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Default Re: Maintaining UK Credit History whilst in Canada

Twitcher1958 If I register as a Non Resident Landlord does that mean I pay no tax on that which is earned as rental income here? I was under the impression that I could do this and then just pay any tax owed using Self Assessment at the end of the year rather than have it deducted at source by the agents or tenants?

Thanks
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Old Jul 20th 2021, 8:29 am
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by Farmer on a bike
For clarity, a T1135 refers to cost, not value. However for new immigrants that cost is fair market value on the day one becomes a tax resident, thereafter (for future years this is the deemed 'cost' and the basis for reporting regardless of whether the asset changes in value or not. Some assets this may cause few problems, some more volatile assets it could become complicated, such as Bitcoin. New immigrants do not need to report on a T1135 in the tax year in which they first become a tax resident. As Siouxie suggested, written valuations stating fair market value on or as near to the day of becoming (before not after) tax resident could prove invaluable. These are not self assessed valuations. They are usually in the currency of where the asset is held, the Bank of Canada rate on the day of taking up residency is the prevailing CAD value.
Due to the penalties for getting it wrong, always worth talking to an accountant, even worth a chat before arriving for those with significant assets. There are many independent accountants, MNP have offices across Canada and may be easier to find from overseas. We used MNP for a while, when our accountant with them set up his own firm, we sought him out and moved to his firm. I am not a Canadian accountant and have no vested interest in whomever one chooses to use. My advice however is always to use a professional, from my experience they save more than they cost.
https://www.canada.ca/en/revenue-age...orm-t1135.html
Thank you! Will try and seek some professional advice. Are MNP an accountancy and is it likely I can get some "general" advice without them starting the meter in your humble opinion?
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Old Jul 20th 2021, 10:38 am
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by dogstar
Twitcher1958 If I register as a Non Resident Landlord does that mean I pay no tax on that which is earned as rental income here? I was under the impression that I could do this and then just pay any tax owed using Self Assessment at the end of the year rather than have it deducted at source by the agents or tenants?

Thanks
The way it works for us is that we declare our rental income and expenses here in Canada on our tax form each year and it all gets added into the mix. I think we had to fill in the relevant NRL form originally and submit to HMRC, they allocated a number and we then supplied this to our UK letting agent as proof we were declaring elsewhere so they didn’t have to withhold tax.

Because my husband’s income was of a certain level, he gets sent a HMRC form each year and has to supply the relevant info from our spreadsheet but doesn’t get a tax demand from them.
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Old Jul 20th 2021, 1:11 pm
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by Twitcher1958
The way it works for us is that we declare our rental income and expenses here in Canada on our tax form each year and it all gets added into the mix. I think we had to fill in the relevant NRL form originally and submit to HMRC, they allocated a number and we then supplied this to our UK letting agent as proof we were declaring elsewhere so they didn’t have to withhold tax.

Because my husband’s income was of a certain level, he gets sent a HMRC form each year and has to supply the relevant info from our spreadsheet but doesn’t get a tax demand from them.
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Old Jul 20th 2021, 7:33 pm
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by dogstar
Thank you! Will try and seek some professional advice. Are MNP an accountancy and is it likely I can get some "general" advice without them starting the meter in your humble opinion?
MNP are a national accounting firm, there are lots of smaller local ones too. Don't think too many accountants are in the business of giving out free advice.
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Old Jul 29th 2021, 11:00 am
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Default Re: Maintaining UK Credit History whilst in Canada

Is it possible to transfer your UK credit history when emigrating to Canada?
I have a very good score over here, and would not want to be starting from beginning in a new country
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Old Jul 29th 2021, 11:51 am
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Default Re: Maintaining UK Credit History whilst in Canada

Originally Posted by John123456
Is it possible to transfer your UK credit history when emigrating to Canada?
I have a very good score over here, and would not want to be starting from beginning in a new country
You'd have to be prepared to start from scratch, in any country you move to, you can't take your score with you. But you are moving to the US aren't you? So this Wiki article is your best bet - https://britishexpats.com/wiki/Fatbr...it_and_Finance
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