another tax question!

Ok, im a bit thick, and trying to find out for tax purposes, if i will be considered a resident of canada, or a non resident with a whm visa. Im all set to file my 2007 taxes and there is one benifit i can apply for if im considered a resident in 2008. As im hoping to have applied for the visa and left by the end of this coming April, I'd like to know! Just thought I'd ask you all what you did here, before going and asking someone, dunno maybe a taxman/taxwoman/taxperson

My brother is an accountant so I got him to take care of this for me.

What I do know is that if you have any holdings within canada still you are considered a resident. This includes any significant amount of property ( possessions ) and / or bank accounts. Also if you have earned any money in canada at all during the year in question you will need to report both your UK income and your canadian income to tax canada.

There is a system in place to prevent double taxation. eg.Any taxes you pay in the UK will be applied to your total income deduction and you will not be taxed more. I could explain it more clearly if I had a tax program in front of me right now, but at the moment I can't be any more specific, sorry.

The big thing is that if earn any money in the uk and bring it back to canada without reporting your income properly you can be spanked for a whole lot of money.

Make sure you keep any P60's you have any payslips, just in case.

you could submit an NR73 form to the CRA to get an opinion on what your residency status is:

http://www.cra-arc.gc.ca/tax/nonresidents/common/residency-e.html

if you were living in canada for a portion 2007, you are required to file a canadian income tax return for 2007. whether or not you also have to declare your uk income in that year depends on your residency status.

i had to go through this is 2006. because i was not considered a non-resident for the purposes of income tax, i had to declare my canadian AND uk income on my 2006 return. but i also claimed a foreign tax credit (equal to the uk income tax paid in that year) in order to avoid being double taxed. i recommend you do the same.

I will be a Canadian resident in tax purpose while in UK (I have a property in Canada).

I know that I have to report the world income and pay the difference in the actual tax paid in UK & the Canadian tax based on the world income.

My question is:
When I calculate the UK tax, do I include
1. the actual TAX
2. national insurance.

If I can't include the national insurance, I will end up paying extra in Canada. I want to avoid this case.

Anyone has an answer for this? Thank you!

I'd be wary of submitting the NR73 to the CRA without getting independent advice first - you don't want to give them a chance to deem you a resident without doing the prework that is sometimes necessary to avoid this.

I just had an article on this topic published in Canadian Money Saver, please google "Lifeisgrand tax" and you'll find it. Email me if you have any questions and I'd be glad to help out.

Looks like you've recieved alot of advice.

If you are not intending to settle permanently in the UK, as I would assume on a WHM. If you have earned ANY money in canada during the tax year, or have any intention of bringing anything you earned in the UK home with you. I would suggest you declare your earnings in canada as well as the UK.

I went through a number of headaches getting this all sorted any the bottom line is that the advice I recieved from two separate Certified accountants was to file any income. Revenue canada will not tax you on anything you've already paid taxes on, unless you have paid to little tax.

Having gone through an audit of my UK and canadian income last year I know this to be the case. The worst that will happen is that they demand proof of your employment within the uk.

As for taxes in the UK I would urge anyone whom is unfamiliar with the system to seek professional advice at least the first time you file, if you choose to do it yourself. It is invaluable.

I can provide both UK and Canadian tax services at reasonable rates. Check my website lynch.pro