Tax Help
 

Hi I was wondering if you could help me

My Boyfriend has been living with in the UK for just under two years. While he has been here he has not been working and i have been supporting him.

I am self employed and so will be filing my tax return and paying my taxes in the UK.

My Question is when i become a PR in june in Canada and i take my earning with me to Canada what do i do with my taxes. I know Alex does not have to pay taxes when he returns to Canada as he has been unemployed but do i have to pay tax on the money i bring with me to Canada. Also what are the max amounts i can take into the country

Thanks

Re: Tax Help
 

This time next year you will have to declare to the Canadian Revenue Agency all your worldwide income from when you become tax resident in Canada (which sounds like it will be June) to Dec 31st 2014. You cannot choose to pay your tax in UK

Re: Tax Help
 

Whatever money you bring to Canada before taking up tax residency is not taxable in Canada. You can bring whatever you have. Over $10k in cash or negotiables carried with you has to be reported on entry.

The Canadian tax year runs with the calender year. You would file your taxes by June 15 the following year if you are self employed. If you owe tax there is no interest on amounts paid by April 30, after which CRA charge interest on taxes due. If you are employed, you should file your taxes by April 30.

Wherever you income is derived from, you must as a tax resident of Canada report and pay tax in Canada.

If you have assets outside of Canada over $100k, you also need to file a T1135 with your tax return.

Re: Tax Help
 

Hi Aviator

That's helpful. I have just started trying to do my return and it looks horrific! I was working in the UK unti, August and started working in Canada in December. We still own a house in the uk that we are renting out. I guess that means I have to fill in the T1135.

I'm worried Canada will tax me on my uk income even though aaIve already paid tax on it. Is this likely? I guess it means I won't get a rebate for the month I worked here, as I had already earned in the uk?

Are there any tax experts here?!

Thanks

Re: Tax Help
 

You won't need to do a t1135 in your first tax return if the house was your primary residence before you became tax resident of Canada.

You are liable for tax in Canada as a tax resident on your world income, which includes the UK rental income. This is definite, not just likely. There are some operating expenses you can claim against this if they are incurred to earn the rental income. If you have paid tax on the rental income in the UK you can claim for the foreign tax paid on your Canadian tax return, which will reduce Canadian tax liability. You need supporting documents of having paid the tax to claim the deduction.

How this will impact your CAN tax situation, your accountant should be able to advise, it will however increase your income, which may put you into a higher tax bracket.

If you sell the property while a tax resident in Canada, any property value increase between the deemed acquired value (in CAD$), i.e. when you became a tax resident of Canada and selling it (in CAD$) is liable to Capital Gains tax in Canada. Property values and the FX both have an affect on this.

You can get a non taxable status in the UK as a non resident landlord which may save some complication. It would be worth getting an accountant to help you with your tax returns.

Re: Tax Help
 

Thanks Aviator. My understanding was that we can have the rental income taxed in the UK rather than in Canada?

Do you know how the Canadian tax folk assess deemed acquired value of property?

Hmm, I was hoping not to have to pay someone to do my tax, but maybe I should. I guess any tax/accountant should be able to do it?

Re: Tax Help
 

It doesn't work like that. If the profit on the rental income exceeds your personal allowance then you will owe tax in the UK. You also have to add the rental income to your Canadian tax return. As Aviator mentioned above, you can claim a credit for UK tax paid against Canadian tax owing on the same income.

You don't want to let them do that. They will err in their favour, not yours.You need an appraisal of the property on the day you left the UK. An appraisal by a qualified surveyor is bullet proof. A suggested market value by an estate agent on their letterhead will probably suffice.

Make sure you see someone who is used to dealing with foreign income.

Re: Tax Help
 

From my experience, use an accountant not a tax preparer. A good one could save you more than their fees.

Re: Tax Help
 

Thanks, I'll start searching!