sgbolt

Hi there, i have a property which i rent in the UK so i know i have to pay tax on the income here in Canada, but i have been advised differently this year. Last year I was told i could offset my flights to the UK against my income, but this year I have been advised that i can't. It obviously makes a huge difference to my income. any advise and tips of reducing my tax bill. Ta

Aviator

Unless you could come up with some compelling reason why you needed to fly to the UK to deal with your property, CRA would be unlikely to allow the cost of flights. If you flew in for a day or two or spent your time there renovating the property etc, a 2 week trip to the UK is unlikely to qualify as a business expense.

If you claimed your flights last year, and have now found you should not have, you should ask an accountant if you need to file an adjustment for last year as well. If CRA audit and pick up on it, there could be penalties as well as tax and interest.

sgbolt

Thank you so much for your helpful reply. It's so confusing (but i guess it's designed to be). Could I be cheeky and ask another related question? Do you have any understanding of how the UK personal allowance works for Canadian residents (from UK). Basically is there the option to pay taxes for the rental income in the UK OR here and if so does it make any difference in what I pay - is one better financially or not? Thanks

Aviator

You have no choice where you pay tax. The only bearing on tax is where you are living, not citizenship or country of origin as far as tax residency is concerned. If a tax treaty exists, you only pay tax once, if it does not, you pay twice. Canada and the UK have a tax treaty.

If you are a tax resident of Canada, you are obligated to report income and pay tax in Canada. If you paid tax in the UK and have this documented from HRMC, you can claim for foreign tax paid in Canada. You then pay the difference here, if there is any.

Shirtback

+1.

There's some info & links on the MBTTUK section here. Unfortunately, search function being a bit FUBARed at the moment, I can't point you to the exact post.

I recently started researching the issue, & HMRC has a whole section on non-resident landlords, which, if one can overcome the frustration of some rather circular links, is useful.

The claiming flight expenses was a complete mare's nest years ago when I tried to deal with it for my ex. IIRC, & my memories are vague, plus the rules have probably changed, they were admissible under certain conditions, in the context of certain business structures. I personally wouldn't try & claim 'em on the limited info you have provided concerning managing an overseas rental property.

S

sgbolt

Thanks again to the helpful replies. Any other tips on lowering my capital gains much appreciated.

sgbolt

sorry what is MBTTUK?

Shirtback

Moving Back to the UK Forum here on B(ritish) E(xpats).com

S

Shirtback

?? Capital gains? Or rental income?

??

S

sgbolt

yes sorry income.
I still can't find the MBUK section. Is it under articles?? I'm lost!

Shirtback

http://britishexpats.com/forum/forumdisplay.php?f=61

I'll try & find the posts/links I referred to above when I get home & can operate on something other than a "smart" device !
S

sgbolt

Thanks a lot shirtback - much appreciated

Shirtback

You're welcome

http://britishexpats.com/forum/showt...=822394&page=3

Post #31 & onwards contains possibly relevant info.

S

sgbolt

thanks I shall have a read.