woz718

I wonder if anyone could suggest/ recommend an experienced tax consultant who may be able to investigate the question relating to the lump sum/ gratuity paid out to Service leavers from the British Army. There has been much debate about this so far and I would like to try and get a definitive answer from an expert.

many thanks

Wozzie.

Frank'n Sense

Wozzie,

I believe that my accountant would be able to answer the question for you as he is qualified in UK and Canada. Worth a go anyway:

Steven English CGA, FCCA, MBA
Griffin Centre
204 – 901 West 3rd Street
North Vancouver, B. C.
V7P 3P9

Office Telephone: 778 338 8079
Cell: 778 899 8887
email: [email protected]
Website: www.englishco.ca

Warmly,

Frank

marcustandy

Woz (S or M?),

Let us know how you get on! The answer could make 5 months difference with regard to moving dates!!

bielbs

and me!!

singingringingtree

Frank put us in touch with Steven (police pension/lump sum advice) and we found him very knowledgeable and very helpful.

JonboyE

Care to share? I'm very interested too.

chinook

I have contacted two tax specialist a few weeks before Christmas, they said they will get back to me with an answer in the New Year!!!!

I am in Canada and if I dont get the right answer I too will be going back to the UK for a 5 month demob visit.

Robbie500

Having gone through this myself the answer is very simple. As long as you are still resident in the UK and receive your lump sum it will be tax free. If you move to Canada as a permanent resident prior to getting your lump sum, you will be taxed on the whole amount as income. You can put off tax by placing it in an RSSP.

Just do not move until you get the lump sum into your UK bank account.

Rob.

JonboyE

But would a new resident have RRSP room?

Safest advice by far.

marcustandy

Well here's another angle that was put to me the other day by someone who isn't a tax expert but is part of the resettlement process and knows others who have landed before their gratuity was paid.

Your gratuity/lump sum isn't tax free! You have contributed to the final payment and you have paid tax on those contributions over the years. Dept 2 at Ty Glas (tax office) will be able to confirm this. Therefore under the scheme of not being taxed twice, the Canadian tax authorities shouldn't tax your gratuity payment.

Bear in mind this is how it was explained to me. I'm not saying it's right or wrong but it is the question I would be posing to a Canadian tax expert. Neither would I make the move prior to the lump sum being paid unless I had clear written confirmation that it would remain tax free.

singingringingtree

Basically it all hinges on the difference between being a Canadian resident and being a Canadian resident for tax purposes - different things and dependent on what interests you have in the UK.

singingringingtree

As JonBoy says, probably safets way is to stay here until you get the lump sum. Alternatives seem a bit complicated.

skyturner

Just to detract a little, I needed advice for when I move to canada in 2012, I was recommended a top Lawyer/tax advisor who came to the house, chatted for an hour then emailed me a 4 page report on stuff that I knew already....now I have a bill for £1,300!!!!! just check thing first.

JonboyE

I agree with this. It is quite possible to the resident in Canada for immigration purposes (i.e have landed and received PR) but not be resident for tax purposes. As long as you are not tax-resident in Canada when you receive your lump sum then it is not taxed in Canada - regardless of your immigration status.

bielbs

On the thread 'ex military making the move' Mrs Miggins states that she used KPMG accountants in Lethbridge and they enabled her to receive the lump sum tax free.

I will be contacting them prior to the big move!