Redundancy Pay in the UK
 

If someone gets Redundancy Pay in the UK (which is tax free to a certain limit) after becoming tax resident in Canada, do they have to declare it on their personal taxes in Canada?

Re: Redundancy Pay in the UK
 

I would imagine so, severance pay in Canada is taxable.

http://turbotax.intuit.ca/tax-resour...-in-canada.jsp

Re: Redundancy Pay in the UK
 

Thanks Aviator. Does it matter if the HMRC does not know that you are no longer a tax resident in the UK, and hence let you take advantage of the tax-free benefit even while you live in Canada?

Sorry for the stupid question. I know there is no escape from the taxman but I am just exploring what other legitimate options are out there.

Re: Redundancy Pay in the UK
 

If you have moved to live in another country, then you should have informed HMRC in any case.

Re: Redundancy Pay in the UK
 

Are there any advantages of doing that or is it just an obligation?

Re: Redundancy Pay in the UK
 

You could be due money from overpaid taxes, but AFAIK there is a form you should complete.

Re: Redundancy Pay in the UK
 

It's a P85 form from HMRC, and mikelincs has a point, my wife and I both had tax refunds from HMRC after we'd sent this form in.

Re: Redundancy Pay in the UK
 

Was that tax refund from the years that you lived in the UK? :confused:

Re: Redundancy Pay in the UK
 

HMRC are not in the business of giving refunds from anywhere but the UK, so it must have been, it's particularly important if you were PAYE.

Re: Redundancy Pay in the UK
 

We left the UK in August 2013, we submitted our P85s soon after we left, and in February 2014 the tax man sent us a P800 showing we were due a refund on tax paid in the 2013-14 tax year, basically from April to August 2013.
They can only make that calculation once they have received your P85 in which you tell them the date you left the UK.

Re: Redundancy Pay in the UK
 

Yeah that makes sense. But what I meant was, did they refund you only for the particular year when you left the UK. Or did they give you any monies from the years before that as well?

Re: Redundancy Pay in the UK
 

I never bothered to tell them, they have never tried to contact me in 20 odd years. Probably not worth sending in a P85 20+ years late!

If you are an overseas resident the payer should be able to send the funds to you without tax, you then report on your CAD return the full amount. If tax is charged in the UK, just get a certificate of foreign tax paid and submit that with your CAD tax return for credit toward any CAD tax due.

Re: Redundancy Pay in the UK
 

OK thanks everyone. So back to the original question, does it make any difference to CRA if you have declared non tax residency in the UK or not?

And secondly, how do they know how much tax you have already paid in the UK in a given financial year?

Re: Redundancy Pay in the UK
 

hmmm would you get into trouble if you left the UK a long time ago and didnt know to put a P85 as you left at very short notice ? Just erm wondering about a friend you know lol

Re: Redundancy Pay in the UK
 

The CRA doesn't care about what you may, or may not, have declared elsewhere. If they deem you to be a resident for tax purposes, they will require you to pay tax.

Aviator answered your second question.