Selling your UK home - taxed after landing?
Mar 23rd 2007, 3:16 pm
#1
Ski Bum
Thread Starter
Joined: Apr 2006
Posts: 129
Selling your UK home - taxed after landing?
If you land, buy a house in Canada and then sell your UK primary residence, do you run the risk of Revenue Canada turning round and saying "OK, your primary residence is in Canada, this property you are selling in the UK is an investment property, so hand over the tax on the value between the price you receive and the price you paid 10 years ago"
It would seem daft to me, but has anyone else looked into this?
It would seem daft to me, but has anyone else looked into this?
Mar 23rd 2007, 3:30 pm
#2
Joined: May 2004
Posts: 8,984
Re: Selling your UK home - taxed after landing?
Once you become a Canadian resident for tax purposes (don't confuse with PR status) then of course you must report your worldwide income in your tax return. By the same token you will take credit in such tax return for taxes paid abroad, especially if there is a traety between Canada and country you made profit in to avoid double taxation.
But remember that what you'll report on Canadian tax return is not the same what you'll report in UK. All your capital property abroad has to be evaluated by yourself as of the day of landing in Canada. The fair market value of your property abroad will be your cost of this property from the day you land. Then, after you see it you will calculate the difference between selling price and value of the property as of your landing day and report your capital gain or loss in Canadian tax return. Whatever you paid for property in UK is irrelevant for Canadian taxman - what counts is the fair market value of property on the day you landed in Canada.
Above is just a crash course and a brief intro to complex crossborder taxation matters - make sure to consult with a crossborder tax expert before you do anything.
But remember that what you'll report on Canadian tax return is not the same what you'll report in UK. All your capital property abroad has to be evaluated by yourself as of the day of landing in Canada. The fair market value of your property abroad will be your cost of this property from the day you land. Then, after you see it you will calculate the difference between selling price and value of the property as of your landing day and report your capital gain or loss in Canadian tax return. Whatever you paid for property in UK is irrelevant for Canadian taxman - what counts is the fair market value of property on the day you landed in Canada.
Above is just a crash course and a brief intro to complex crossborder taxation matters - make sure to consult with a crossborder tax expert before you do anything.
Mar 23rd 2007, 3:35 pm
#3
Ski Bum
Thread Starter
Joined: Apr 2006
Posts: 129
Re: Selling your UK home - taxed after landing?
Once you become a Canadian resident for tax purposes (don't confuse with PR status) then of course you must report your worldwide income in your tax return. By the same token you will take credit in such tax return for taxes paid abroad, especially if there is a traety between Canada and country you made profit in to avoid double taxation.
But remember that what you'll report on Canadian tax return is not the same what you'll report in UK. All your capital property abroad has to be evaluated by yourself as of the day of landing in Canada. The fair market value of your property abroad will be your cost of this property from the day you land. Then, after you see it you will calculate the difference between selling price and value of the property as of your landing day and report your capital gain or loss in Canadian tax return. Whatever you paid for property in UK is irrelevant for Canadian taxman - what counts is the fair market value of property on the day you landed in Canada.
Above is just a crash course and a brief intro to complex crossborder taxation matters - make sure to consult with a crossborder tax expert before you do anything.
But remember that what you'll report on Canadian tax return is not the same what you'll report in UK. All your capital property abroad has to be evaluated by yourself as of the day of landing in Canada. The fair market value of your property abroad will be your cost of this property from the day you land. Then, after you see it you will calculate the difference between selling price and value of the property as of your landing day and report your capital gain or loss in Canadian tax return. Whatever you paid for property in UK is irrelevant for Canadian taxman - what counts is the fair market value of property on the day you landed in Canada.
Above is just a crash course and a brief intro to complex crossborder taxation matters - make sure to consult with a crossborder tax expert before you do anything.
