A Few Questions...

Alright, so I am still in the midst of planning my move to the UK but I have a few questions....

1. What do you guys do with your address on your passport? I'm guessing that many of you don't give up your Cdn citizenship and therefore still travel with a Cdn passport...but do you have to put your UK address on it??

2. Filing taxes as a resident of Canada...I realize you apply to the British government to not pay their income tax as well as apply for your health insurance money back (I believe you can only do this when you officially leave though?) however how does the CRA view your income? Say for arguments sake you are making £28K in the UK gross per year. Does the CRA value that as $44K? Do they take into consideration that you haven't made EI or CPP payments (because you haven't been living inside Canada and therefore those deductions not taken off)??

3. What did everyone do with their vehicles? I know that I'd be back in Canada after a year or so and would need my vehicle back. Did you sell your car and then buy another one when you got back or did you store it? If you stored it, how did that go??

Certainly any input will be greatly appreciated. It's some of the last steps towards figuring out if everything is do-able.

1, you never "give up" your Cdn passport, regardless of what citizenship you later take.
2. you are non-resident of Canada the moment you move to UK< and are tax resident there immediately. You file a dperture return for canada at teh end of the year you leave.
3. They sell them.

forums.serbinski.com

are you sure about non-residency? I'll still have bank accounts, an RRSP fund and a credit card in my name here....not to mention a horse as well....I would say those are some pretty significant ties.

I didn't mean actually give up your Cdn passport. I questioned about the home address in it...does that have to change to your UK address?

I think I figured out the CRA tax issue though. It took a lot of searching and I only found it after I posted this.

You haven't figured out the tax issues, obviously.

You are non-resident of canada unless you have a house and spouse in canada, and even then, only if you regularly (like weeky) return there. I won't ask about the relationship you have with your horse.

So you are non-resident of canada, and should file a departure return.

The addrss in your passport is there so that, if fountd, it can be returned to you; so you might wantto put your current address where you actually get your mail.

What are residential ties?
Residential ties in Canada include:
■ a home in Canada;
■ a spouse or common-law partner and dependants who stay
here while you are living abroad;
■ personal property in Canada, such as a car or furniture; and
■ social ties in Canada.
Other ties that may be relevant in determining your residency
status include a Canadian driver’s licence, bank accounts or credit
cards issued in Canada, and health insurance with a Canadian
province or territory.

http://www.cra-arc.gc.ca/E/pub/tg/t4131/t4131-10e.pdf

What are residential ties?
Residential ties include:

•a home in Canada;
•a spouse or common-law partner (see the definition in the General Income Tax and Benefit Guide) or dependants in Canada;
•personal property in Canada, such as a car or furniture;
•social ties in Canada.
Other ties that may be relevant include:

•a Canadian driver's licence;
•Canadian bank accounts or credit cards;
•health insurance with a Canadian province or territory.
For more information, see Residency - Individuals.

http://www.cra-arc.gc.ca/tx/nnrsdnts/nd ... s-eng.html

I'm glad that's all clear as mud! That's why I'm a little hesitant as to why you say that I would not be considered a resident of Canada....(bank accounts, credit cards, drivers licence, health insurance with province - I'd still have all these when I leave. I'd be gone approx. 1-2 yrs). Maybe I'll just ask the CRA!?

Anyone else know??

As i said, the TREATY overrides all these CRA regs. You live and work in UK and are a tax resident there.

Plain and pretty simple.

You can check all this at forums.serbinski.com

The CRA will always say you are resident, but will then kick you out when they see you filed a UK return (which you have to include when you file).

I am a Canadian who has been living in London for about 2.5 years. The tax advice I was given was in line with what agnelson is saying. In my case I am likely still a resident of Canada (I still have a bank acct,credit card, DL, a small mutual fund account, and I left my car with my parents). I didn't want to liquidate everything as I wasn't sure how long I would be staying (definately till the end of my 3 year visa, but who knows after that with UK immigration policies changing every 6 months). My accountant told me that I am likely considered a resident of both countries but under the tax treaty, my ties are closer to the UK so that is definately where I am 'resident for tax purposes'. So, I was told to file with the CRA as a non-resident of Canada (ie - don't declare my UK income), and had to do a deemed disposition of property and pay departure tax on my mutual funds. Essentially, it sounds like all these secondary residential ties to Canada do not matter as long as you are considered a tax resident of the UK (contrary to what most of the posters on various forums seem to say)

My question is - how likely is it to have this situation questioned on return to Canada? What documentation do I need to keep to prove I'm a non-resident under the tax treaty, if audited by CRA? I've seen a lot of horror stories on the internet regarding ex-pats returning to Canada to find they owe massive bax taxes and penalties - but all of these stories seem to pertain to non-treaty countries or people who are going back and forth(and earning income in both countries). Is it likely that the CRA will question my situation when its a straight-forward case of me working and living in the UK for a few years, and then going back to Canada. Pardon the paranoia - thats what happens when you read a whole bunch of conflicting information on the internet.

Also - what issues should I be considering with respect to tax status should I return to Canada (I already know I have to unravel the 'deemed disposition of property'). I imagine its a good idea to time things so that I have no UK income in the tax year that I go back too Canada.

Agnelson: you insight would be particularly welcome in this regard.
Thanks!

My insight on tax matters is given at forums.serbinski.com, but there is no doubt that your non-residency has been accepted, simply because you went to a treaty country, met that countries tax residency requirements, and outweighed your Cdn ties with UK ties. And it will not be overturned if you return in 1, 2 or 10 years.

The period of time you are out of canada no longer really matters. Even if it still did, 2 years was the standard.

On other matters like unravleling (you would not do that) can be discussed at serbinski.

As i said, the TREATY overrides all these CRA regs. You live and work in UK and are a tax resident there.

Plain and pretty simple.

You can check all this at forums.serbinski.com

The CRA will always say you are resident, but will then kick you out when they see you filed a UK return (which you have to include when you file).

A bit confused about the above, I don't file a UK tax return as all my tax is remitted through PAYE (as I only have employment income). I don't recall being asked for a copy of my UK return when I filed my departure return with the CRA. Is filing a UK return a requirement of being considered a "UK tax resident"? The word over here is that you only file if you need to report income above and beyond PAYE.

If you filed a departure return, wh y are we asking about CDn residence: you have already filed non-residncy.

If you were trying to maintain residence, then you would report world income, and obviously then ask for credit for the UK tax you paid. THAT would be when you would provide UK doscs, and then be deemed non-resident.

You are already non-resident, and indicated such when you (a) files a departure return, and (b) did not include your UK income on your return.