matt1670

Hi Folks,

Hope that there are a few people out there that can shed some light on my situation.

I have started my process for immigration under the FSW program but also committed to my current contract until Nov 2016 so looking to come over straight after that.

I am fortunate enough to be receiving a tax-free lump sum and immediate pension straight after my current contract but not sure what implications I have with regards to paying tax on any of it once moving to Canada?

I will pay tax on my monthly pension in the UK but don't want to pay any more and especially on the lump sum.

I also have to tell CIC on the relevant paperwork about this?

Cheers

Mat

christmasoompa

You won't have to tell CIC about it, it makes no difference to your visa application.

With regard to the lump sum, my (very vague) understanding is that you'll have to pay tax on it once you're tax resident in Canada, so if it's a substantial amount, is it maybe worth delaying your move? Although obviously you may not have the time to delay it before losing PR if you've applied now and don't want to move until 2016!

Hopefully JonboyE will be along to give you advice on that though, best of luck.

matt1670

Thanks Christmasoompa.

I hope to hear from JonBoyE. Don't want to get stung twice but appreciate rules are rules! I also have a house which I will be selling so need to get these financial issues sorted as a priority.

Cheers

christmasoompa

Don't think you'd get stung twice, you can only be tax resident in one country after all! But hopefully the tax experts will weigh in and give you an answer, good luck.

ann m

Don't become a tax resident in Canada until after you have received your lump sum (I guess I should qualify that by saying that if it is a substantial sum....). What you have/own before you move is not of interest to Canadian tax authorities...

Aviator

If you are a Canadian Tax Resident when you receive your lump sum it will be taxable in Canada. It would be safest to not become a tax resident until you have received it and funds cleared.

Your pension will be taxable in Canada, however you would get a foreign tax paid credit (so long as you have supporting docs). If you would have paid more tax in Canada then the UK tax, you pay the difference here.

If you have property in the UK, get a valuation as near to when you leave as possible. If you sell it after becoming a tax resident, the difference may be taxable if you make more then the valuation, depending when you sell it.
If you have assets overseas when you fild your first tax return, make sure you file a T1135 as well. Penalties for failing to file are quite heavy.