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-   -   Tax Residency (https://britishexpats.com/forum/canada-56/tax-residency-918598/)

jm_5671 Oct 23rd 2018 7:09 am
Tax Residency
 
Hi everyone, I'm a British citizen who is 10 months into my 2yr IEC VISA in Canada. Today, I got a letter in the post from my bank (RBC) asking about my tax residency. I have two options on the form:

1. I am a tax resident of Canada
2. I am a tax resident of a jurisdiction other than Canada or the United States.

Although I live, work and pay taxes here in Canada I believe I'm still classed as a non-tax resident (as I have yet to fill in a tax return here), so I'd need to select option 2. Can anyone confirm this?


Secondly, Brits who have been in Canada for a few years and still have some assets back home (cash in ISAs, stocks etc), do you fill in tax forms with dual tax residency?

dbd33 Oct 23rd 2018 7:26 am
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582049)
Hi everyone, I'm a British citizen who is 10 months into my 2yr IEC VISA in Canada. Today, I got a letter in the post from my bank (RBC) asking about my tax residency. I have two options on the form:

1. I am a tax resident of Canada
2. I am a tax resident of a jurisdiction other than Canada or the United States.

Although I live, work and pay taxes here in Canada I believe I'm still classed as a non-tax resident (as I have yet to fill in a tax return here), so I'd need to select option 2. Can anyone confirm this?


Secondly, Brits who have been in Canada for a few years and still have some assets back home (cash in ISAs, stocks etc), do you fill in tax forms with dual tax residency?
I can answer the second question. No. You can only be tax resident in one place at one time.

jm_5671 Oct 23rd 2018 7:42 am
Re: Tax Residency
 
Originally Posted by dbd33 (Post 12582058)
I can answer the second question. No. You can only be tax resident in one place at one time.
I'm no expert but I'm fairly confident that's not true. You should be a tax resident anywhere you earn income, right? What if i live in Canada but have a business or rental property in the UK? (I don't, but using them as an example) Those forms of income should be taxable in UK too.

Twitcher1958 Oct 23rd 2018 8:16 am
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582067)
I'm no expert but I'm fairly confident that's not true. You should be a tax resident anywhere you earn income, right? What if i live in Canada but have a business or rental property in the UK? (I don't, but using them as an example) Those forms of income should be taxable in UK too.
In that case, you complete a form (P85) which CRA stamps to confirm that you are paying taxes in Canada, and return it to HMRC. That’s what we had to do - so every year, we declare any income from the UK along with income earned in Canada and pay tax on it. HMRC know this so we don’t get taxed on that income in the UK. There are rules which determine where you are tax resident - suggest you take a look if you’re not sure.

jm_5671 Oct 23rd 2018 8:49 am
Re: Tax Residency
 
Originally Posted by Twitcher1958 (Post 12582085)
In that case, you complete a form (P85) which CRA stamps to confirm that you are paying taxes in Canada, and return it to HMRC. That’s what we had to do - so every year, we declare any income from the UK along with income earned in Canada and pay tax on it. HMRC know this so we don’t get taxed on that income in the UK. There are rules which determine where you are tax resident - suggest you take a look if you’re not sure.
Cheers for replying. That makes sense if I were to earn a significant amount in the UK whilst I live in Canada. Realistically, the amount I'm actually referring to is <= £100 a year for interest earned from a few grand in cash I have back home. Will I need to fill in a P85 form and announce this to CRA?

Twitcher1958 Oct 23rd 2018 9:20 am
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582096)
Cheers for replying. That makes sense if I were to earn a significant amount in the UK whilst I live in Canada. Realistically, the amount I'm actually referring to is <= £100 a year for interest earned from a few grand in cash I have back home. Will I need to fill in a P85 form and announce this to CRA?

I don’t know if there’s a level at which you have to declare - have a look at HMRC site and see if you get guidance there.
Try Tax If you leave the UK to live abroad on gov.uk. The first line says you have to advise them if you’re away for at least one tax year

jm_5671 Oct 23rd 2018 9:35 am
Re: Tax Residency
 
Originally Posted by Twitcher1958 (Post 12582110)
I don’t know if there’s a level at which you have to declare - have a look at HMRC site and see if you get guidance there.
Try Tax If you leave the UK to live abroad on gov.uk. The first line says you have to advise them if you’re away for at least one tax year
I'm referring to tax here in Canada. 'CRA' means the Canadian Revenue Agency.
The money I'll earn in the UK is tax free there as I am a British citizen, I'm just concerned about tax implications here.

dbd33 Oct 23rd 2018 9:49 am
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582067)
I'm no expert but I'm fairly confident that's not true. You should be a tax resident anywhere you earn income, right?
No, you can earn income in many countries in one year and only be taxed on it in one, the one where you're tax resident. Canadian truck drivers, for example, don't pay tax in the US and Mexico when they go and pick up a load of airbags.


Originally Posted by jm_5671 (Post 12582067)
What if i live in Canada but have a business or rental property in the UK? (I don't, but using them as an example) Those forms of income should be taxable in UK too.
You may pay the tax in both countries but then you'd gain a credit in the country where you're resident for any tax paid in the one where you're not. In the end you'd be paying tax at the rate of the location of your tax residency. Generally people are tax resident where they live so I expect, but do not know for sure, that it's Canada for you.

Aviator Oct 23rd 2018 2:34 pm
Re: Tax Residency
 
https://www.canada.ca/en/revenue-age...cy-status.html

A visitor can be a tax resident, it has nothing to do with immigration status. As a tax resident of Canada, all income, from anywhere in the world has to be reported to CRA on a T1. The tax years is Jan 1 to Dec 31. All tax residents are required to file a tax return, every year.

Aviator Oct 23rd 2018 2:36 pm
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582120)
The money I'll earn in the UK is tax free there as I am a British citizen, I'm just concerned about tax implications here.
Depends on the source, but unless it is a gift or lottery winnings, likelihood would be it should be reported to CRA. CRA require world income to be reported. Talk to an accountant, they can advise best.

Aviator Oct 23rd 2018 2:37 pm
Re: Tax Residency
 
Originally Posted by jm_5671 (Post 12582049)
Although I live, work and pay taxes here in Canada I believe I'm still classed as a non-tax resident (as I have yet to fill in a tax return here), so I'd need to select option 2. Can anyone confirm this?
My guess would be that you are tax resident of Canada


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