Kennedyboy

Hello,

After 15 years in Canada my wife and I are considering the possibility of returning to the UK. I am not looking for a list of positives and negatives but rather any helpful information that anyone may have on issues such as what paperwork do we need to complete (both for UK and Canada Governments), tax planning, shipment of belongings, transfer of finances etc. We own one home in Canada and one in Scotland. The Canada home is our primary residence and the Sotland one is rented out. We report it on our taxes as a foreign property and pay tax on all the income. Any info on making such a move go smoothly would be hugely appreciated.

Regards

Siouxie

Lots to think about! Initially here's a couple of things to look at..

https://britishexpats.com/wiki/Tax_a...Leaving_Canada
https://britishexpats.com/wiki/Tax_a...Canada#Selling

Are you both British Citizens?

https://britishexpats.com/wiki/Categ...Back_to_the_UK

I'd suggest posting also to our Moving Back to the UK forum https://britishexpats.com/forum/moving-back-uk-61/

scilly

Have you got your Canadian citizenship?

If not, may I suggest that you think about getting it in case you don't settle in the UK and decide you want to come back to Canada.

Kennedyboy

Yes we are both UK citizens previous to moving to canada. We lived in uk from birth to aged 30 roughly. Have been in Canada 12 years and are both now Canada Citizens. We have 2 children aged 3 and 6 who have both Canadian and UK passports.

shelley748

If you don't mind me asking- I would like to know about the renting out a UK house - I may be inheriting one and I have not closed the door on returning to the UK at some point from Canada.

Did you use a property management company? Do you have to file a UK tax return for the UK income? If you got a waiver to have the tax not deducted in the UK how hard was that?

Just trying to figure out the best way to move forward thanks.

Kennedyboy

We are lucky enough to have family near the property who keep an eye on it for us. As for taxes, as a canadian resident and citizen I am required to declare all worldwide income and complete a form T1135 each year. Failure to do so can result in massive fines and legal fees. I know this as I unwittingly neglected to fill this in initially and had to submit a voluntary disclosure to amend my errors. It is worth doing it right from the start. The tax rate on the income is taxed at your rate in canada. The UK has a tax treaty with canada so if you pay tax here you dont pay tax in the uk.

jandro

From what I understand for the UK government you have to complete the TOR form. You have to declare to the CRA the date you left Canada and you are deemed to have sold your assets and have to pay tax on it. Some call this a departure tax.

Kennedyboy

Ah yes the departure tax. The biggest rip off ever invented by any tax system. In my case the house I own in the UK was constructed by myself and my father while I lived in Canada (many trips back, huge amount of swear equity from my dad). Due to the amount of favours and hard work put into the build the on paper cost is very low. The property cost in the region of $340,000 but is now worth in excess of $600,000. If I ever leave canada the government will automatically expect I pay tax on the value-cost. I'm not sure but it may only be taxed on 50% of the gain but still it's a bitter pill to swallow

jandro

At least TFSAs and RRSPs are not liable to this tax. However with the RRSP you're liable for the 25% withdrawal tax if you cash it out before you leave. People mention Transferwise for sending funds. I used Hifx when I moved from UK to Canada and I got a decent rate and service. Do you mind if I ask your reasons for considering the move back?

Siouxie

Canada Revenue - Leaving Canada (emigrants): https://www.canada.ca/en/revenue-age...emigrants.html

Kennedyboy

Hey Jandro. Normal bank accounts are not taxable either. It's just anything you have made a capital gain on. As long as your taxes are paid up to date then money in bank accounts can be transferred straight to uk.

jandro

Yeah, I read that.