UK rental income tax
 

Hi there
If i receive rental income from a house in the UK while living in Canada, do i ever have the option of paying the tax in the UK or here in Canada? Obviously it falls below the personal allowance in the UK but added to my salary it's taxed at a much higher rate. Thanks

Re: UK rental income tax
 

If you are therefore a tax resident of Canada, you have to report this as income on your Canadian tax return. Tax does not have 'options'. You cannot choose where you pay tax.

You also need to file a T1135

Rental income Line 126 - Net Line 160 - Gross

Re: UK rental income tax
 

Thanks I thought not. Ive been filing for a couple of years now but wondered if there was a way to lower my tax bill as it's shot up this year even though my rental income only went up a little bit.

Re: UK rental income tax
 

Do you make RRSP contributions according to your allowance and do you report expenses that you incur because of renting?

Yes don't forget T1135 if you need to file it.

Re: UK rental income tax
 

You will be registered in the UK as a non resident landlord presumably? If you aren't then you should be because you need to file a UK tax return each year to prove that you paid the tax due to Canada revenue. The only way you could pay UK tax on it is if you told HMRC you were living in the UK still, which would be a lie, and the only way you would get your 10k tax free allowance is if you didn't declare your Canadian income, which is also a lie. So keep doing it the way you are and make sure you file a UK return.

Re: UK rental income tax
 

If you're UK non resident you don't pay tax on your non UK income.

https://www.gov.uk/tax-foreign-income/overview

Re: UK rental income tax
 

Sorry? If you're non UK resident then it means you are resident somewhere else so you pay tax on ALL your income to the country that you are living in.

He's talking about whether he can pay his UK rental income tax in the UK or Canada, that is all and the answer is you pay it to the country you are tax resident in, so for him, that's Canada.

Re: UK rental income tax
 

Yes exactly.

If you're non UK resident and you live in Canada, you pay tax on your non UK income (i.e. your Canadian income) in Canada (to the CRA), not to HMRC. But you have to declare all your (worldwide) income to the CRA if you're Canadian tax resident. On your HMRC return (if you have to file one) you declare your UK income. That's what I've done anyway!

https://www.gov.uk/tax-foreign-income/residence

Re: UK rental income tax
 

From what Snowy says and looking at the link he provided (from HMRC) it appears that you pay your UK tax on income here in the UK and then you pay your tax on income earned in Canada to the CRA. I guess my question would be - does the CRA then ask you for the difference in tax, i.e. the higher amount, because in the UK you would have a personal allowance of say 10k and this cuts the tax down considerably. Would the CRA then ask for the rest?

Re: UK rental income tax
 

There is a reciprocal tax agreement between Canada and the UK. If you have paid tax on any tax on income in the UK and provided you have documentation to prove this, you can claim a credit for foreign tax paid on your T1 to CRA.

All world income must be reported on a to CRA. Your global income is assessed and tax calculated, minus the claimed tax credit (if allowed), the balance is what you owe. Combined incomes are what determines the tax band you are in. https://www.canada.ca/en/financial-c...uebec-2/5.html