margotmaynard

At a slight tangent, I just read this:
"[...] if someone is deemed resident for the whole year under the 183 day rule [...] If this interpretation is right they would then be subject to Canadian tax on their world-wide income for the whole year, but would be eligible for all allowable deductions. However, this still doesn't seem right the person would be tax resident in the UK until they moved to Canada."

I can confirm that it's true. We moved to Canada in July 2006. Under the 183 day rule we are deemed resident. They added to number of days three weeks in April and June when my husband had worked in Canada, and taxed him on his UK income for those days. This is money that we have already paid tax on in the UK. We are awaiting information now from our 2006/7 UK return to find out whether we truly will get the UK foreign tax credit our accountants assure us exists.

Beware!I noticed that a few people at the beginning of the thread thought that taxation began at the day you arrive in Canada. It doesn't.

JonboyE

It does exist. The whole point of the UK/Canada tax treaty is to eliminate double taxation.

Generally, you can only be tax resident in one country at a time, but the 183 day rule can create an exception to this as you have found out. However, in any case, you only pay tax once.

the moog

we applied to offset our relocation expenses in T4 this year (moved out here summer 2006 on work permit, but got PR this August 2007)...and just recently got tax return back...funnily enough they refused to include the relocation expenses so no rebate so far...but we're not convinced that this is right.

...I'm thinking we should appeal it.
What seems crazy is that there obviously is ambiguity...otherwise it would be all one way or the other. The fact that some people have had their expenses accepted as offsetable, and others not, seems to indicate that there is a loophole somewhere (or RC varies depending on who you speak to)...

margotmaynard

Yes, of course. The problem is that because of the difference in tax years you will be out of pocket after paying the Canadian tax, while waiting to get the UK tax back.