Pay tax on UK income
 

My daughter has moved to Canada to live with us, she landed as a PR on Sunday.

She is expecting her first baby an so she is still in receipt of maternity pay in the UK which she is taxed on.

I know that she will be taxed in Canada on her worldwide income, so how does she go about stopping paying tax in the UK so that she isn`t taxed twice, or is it that she has to pay it and then claim it back.

I am sure that this has been discussed before but I just can`t seem to find it.

Thanks in advance for your help.

Re: Pay tax on UK income
 

You only get taxed once. She should declare the foreign income on her Canadian tax return and also claim a foreign tax credit. The latter gets knocked off the bill.

Keep all the paperwork. The return will quite likely get audited by Revenue Canada. There is no problem, as long as you can show that tax has been paid. If the tax hit on the gross is higher than what has already been paid, you just cough up the difference.

She could probably ask for the maternity pay to be paid gross but it would likely be more trouble than it's worth, particularly since it's a temporary thing.

Re: Pay tax on UK income
 

You may want to check if she is entitled to receive maternity pay now she is no longer a resident of the UK.

If it is statutory maternity pay, a government website will provide the answers, if it is maternity pay that her former employers are paying to her, she will need to look at her contract of employment.

Apologies if you have already looked into this:D

Re: Pay tax on UK income
 

Yes thanks, we have checked. It is from her employers and she is entitled to her maternity pay even if she is not returning to work.

Thanks for the advice though.

Re: Pay tax on UK income
 

Thanks. We will just save everything and wait until the end of the year.

Re: Pay tax on UK income
 

It shouldn't be a problem. I also have a UK income (a trust fund). That pays out each year and some tax (10%) is deducted before I get it. On my tax return, I declare the gross, along with the tax I have already paid. It's never been a problem, although Revenue Canada always comes back to me asking for proof that the tax was paid.