I am going for an interview for a job in Canada. The job would be due to start 5 months before i finish my Army career. Would i be taxed on my Army earnings in Canada and UK and also would my Tax free lump sum be taxed in Canada as well?

you would prob be paying dual tax and then be able to claim it back in canada. if you bring a lump sum you have to prove where it came from and prob have tax to pay. cant really understand the whole tax thing in canada if you goto uk2novascotia web site they may have info on there

If you were deemed resident for tax purposes you would be taxed on your worldwide income although credit would be given for any taxes paid in a country that has entered into a tax treaty with Canada.

For example, if you had to pay 30% tax in Canada on worldwide income and you had already paid 20% in England, you would have to pay the remaining 10% in Canada.

You are likely to have to pay tax on your lump sum (the tax status of it in the UK is irrelevant) but it is not as straightforward as that and you should really consult a tax specialist in Canada.

HTH

Thanks for suggestions, i believe the company i have an interview with have their own Legal dept, so i may ask them..

I doubt very much the legal department will be able to help, you need to speak to a clever person, accountant etc

Cheers for that, i'll look into it prior to any decision on move

See Here

http://britishexpats.com/forum/showthread.php?t=509954

http://britishexpats.com/forum/showthread.php?t=453109

Your questions have been covered well in depth in the above links by some members with great advice.

But YES it has more or less been established that if your tax resident in Canada when you recieve your gratuity then even though it is UK tax free it will be taxed in Canada.

You really need to leave the forces - recieve your lump sum - then leave for Canada.

By the way I hope you don't mind me asking how are you going to have another job running alongside your Army carreer 5 months prior to getting out as your only entitled to start work within your last 28 days, unless you are doing casual work of course e.g. agency driving / bar work etc...just a bit confused...

Thanks for advice, i will read threads and get a better idea of what i need to do...

Agree with Davie Mac - OH is in the same situation as you. We have got to wait for him to get his graturity before we live permanently in Canada. We are going to be out in Canada 4/5 months before he leaves the Mob but for tax purposes we can not live in our own house (we can rent it out but not live in it ourselves), we can't buy a car either! Both of these would indicate that we would be permanent residents and therefore liable to Canadian taxes.

There are some really good threads on this site related to all of this - I suggest you do some searches as most of your answers will be found.

Liff

Davie,

have read Threads and am now more confused than ever!! It looks like the best option is to wait to the day after lump sum hits my UK account before moving to Canada.

As for the 5 months prior..that was 7 weeks resettlement placement and then a bag full of leave!!

LiffyB,

Thanks for help, i'm gonna have to bite the bullet and wait, just hope company are prepared to keep job open!!