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Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Old Jan 13th 2021, 11:58 am
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Default Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Hi Everyone,

I apologise if this question has been asked before. I couldn't find a post that already addressed my questions. Please direct me to it if you know of one.

I am thinking of moving to Canada from the UK with my family. While searching for a job in Canada, I am thinking of carrying on working remotely from Canada for a UK limited company which will pay me salary and dividends. What I would like to understand are my tax liabilities. If I worked remotely from Canada for a UK company for a whole year, how would the tax payments work? I read the UK/Canada double taxation law but could not really understand it. Would I pay tax in the UK or Canada. I think I will need to pay the tax in Canada. If so, at what rate? I saw something about 15% on dividends.

I hope what I have written makes some sort of sense. I will appreciate it if anyone who lives in Canada but works for a UK company can help me with how the tax payments work. Is it worth it or do you pay so much in tax?

Thank you.

Seseman.
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Old Jan 13th 2021, 4:19 pm
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Default Re: Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Originally Posted by seseman View Post
Hi Everyone,

I apologise if this question has been asked before. I couldn't find a post that already addressed my questions. Please direct me to it if you know of one.

I am thinking of moving to Canada from the UK with my family. While searching for a job in Canada, I am thinking of carrying on working remotely from Canada for a UK limited company which will pay me salary and dividends. What I would like to understand are my tax liabilities. If I worked remotely from Canada for a UK company for a whole year, how would the tax payments work? I read the UK/Canada double taxation law but could not really understand it. Would I pay tax in the UK or Canada. I think I will need to pay the tax in Canada. If so, at what rate? I saw something about 15% on dividends.

I hope what I have written makes some sort of sense. I will appreciate it if anyone who lives in Canada but works for a UK company can help me with how the tax payments work. Is it worth it or do you pay so much in tax?

Thank you.

Seseman.
Hello and welcome to BE!!

Many of us work or have worked for UK companies remotely. - hopefully others will be along to give you their opinions too.

You have to pay taxes in Canada on your world income... you may also have liabilities in the UK, if you are the owner/director. The double taxation agreement - any taxes paid in the UK can be offset against taxes due in Canada, and vice versa, provided you have proof of paying them.
I'd suggest getting your business valued prior to moving over.. there are CGT and other taxes to consider too.
You may be better off if you work as self employed in Canada, invoicing the company from Canada and thus beng able to offset expenses, use of home office etc., against taxes due.


These wiki sections will be of most use initially https://britishexpats.com/wiki/Taxation-Canada / https://britishexpats.com/wiki/Taxes..._Income-Canada / https://britishexpats.com/wiki/Forei...porting-Canada and https://britishexpats.com/wiki/Taxes...gration-Canada
(We have lots of informative sections on taxation in Canada in our wiki : https://britishexpats.com/wiki/Category:Taxes-Canada)
The official word: https://www.canada.ca/en/revenue-age...mmigrants.html

You might find this thread of help
https://britishexpats.com/forum/cana...income-931366/

Last edited by Siouxie; Jan 13th 2021 at 4:22 pm.
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Old Jan 13th 2021, 5:04 pm
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Default Re: Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Thank you so much Siouxie . I will go through all the links you provided.
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Old Jan 16th 2021, 7:14 pm
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Default Re: Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Originally Posted by seseman View Post
Hi Everyone,

I apologise if this question has been asked before. I couldn't find a post that already addressed my questions. Please direct me to it if you know of one.

I am thinking of moving to Canada from the UK with my family. While searching for a job in Canada, I am thinking of carrying on working remotely from Canada for a UK limited company which will pay me salary and dividends. What I would like to understand are my tax liabilities. If I worked remotely from Canada for a UK company for a whole year, how would the tax payments work? I read the UK/Canada double taxation law but could not really understand it. Would I pay tax in the UK or Canada. I think I will need to pay the tax in Canada. If so, at what rate? I saw something about 15% on dividends.

I hope what I have written makes some sort of sense. I will appreciate it if anyone who lives in Canada but works for a UK company can help me with how the tax payments work. Is it worth it or do you pay so much in tax?

Thank you.

Seseman.
You wouldn't have to pay double tax; one can be offset against the other. Inevitably, the bigger question will be your eligibility to remain in Canada. What sort of visa would you be intending to come over on? I think as a visitor you're only able to stay for 6 months? I'm not sure if that is correct though
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Old Jan 16th 2021, 9:41 pm
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Default Re: Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Thank you rivingtonpike. I would be coming over under the FSW PR scheme. My plan is to keep running my LTD company and working for a UK company through it remotely so I would be paid Salary and dividends in the UK for at least a year while settling in and trying to find employment in Canada.

One of the main questions I have is would Canada not expect taxes to be paid over there instead of UK since I would be tax resident or do either country not mind as long as the taxes are paid? Also, the tax rates are different so I would like to know my take home pay if I end up having to pay taxes in Canada.

I will keep going through the links shared by Siouxie and doing more digging around. Closer to the time I will aim to have a consultation with a Canadian/UK tax expert.

In the meantime, I welcome any more information from people who have worked or are working in a similar setup.
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Old Jan 16th 2021, 11:04 pm
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Default Re: Running UK Ltd Company, receiving UK salary&dividend while living in Canada

Originally Posted by seseman View Post
Thank you rivingtonpike. I would be coming over under the FSW PR scheme. My plan is to keep running my LTD company and working for a UK company through it remotely so I would be paid Salary and dividends in the UK for at least a year while settling in and trying to find employment in Canada.

One of the main questions I have is would Canada not expect taxes to be paid over there instead of UK since I would be tax resident or do either country not mind as long as the taxes are paid? Also, the tax rates are different so I would like to know my take home pay if I end up having to pay taxes in Canada.

I will keep going through the links shared by Siouxie and doing more digging around. Closer to the time I will aim to have a consultation with a Canadian/UK tax expert.

In the meantime, I welcome any more information from people who have worked or are working in a similar setup.
You would be resident for taxes in Canada and would have to pay taxes IN Canada on your World income - all income from anywhere and everywhere in the world.
Any tax liabilities you may have in the UK as a owner/director of a limited company could be offset against taxes paid in Canada - as detailed in the links given
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