Can/UK Passport, taxes, social sec, etc...

[kolkol]

Hi all,

I am about to apply to get my UK passport through my Father (who is a full-blooded Englishman, born in London), and hoping all goes according to plan, what can I expect with either country in terms of taxes, social security, etc? I'm a total walt in this area so I have no idea what to expect. Will I still be paying Canadian taxes as well as UK ones? If I get my UK passport but never move there, will I still have obligations such as taxes and what not? If I do move to the UK (and join the Army, what can I expect?) Also, I'm considering spending some time in France, learning French, or going to Rome to study there for a couple years. Those websites state that an EU citizen can use their social insurance from their home country...if I go to those countries before ever living in the UK, can I still get UK social insurance??

Thanks for answering all these questions, I apologize if I sound retarded in my lack of knowledge.

PS. I've always wondered with EU passports, if I have a UK one, but end up meeting a pretty lass in another country or what have you, and meet their citizenship requirements after a period of time, is it possible to "switch" my UK citizenship for the other country's?

[Steven]

If you have a UK passport then permanent residency anywhere else in the EU is pretty much a formality, however you still have to meet their citizenship requirements which vary from country to country to get full citizenship (so you can vote in national elections, for example).

Simply having a UK passport doesn't make you subject to UK tax laws. If you move there obviously you can be subject to UK tax laws, you can file as a non-resident of the UK if you want to and claim a foreign tax credit on your T1, but tax rates in the UK are usually higher once you factor in National Insurance contributions so you generally end up paying the UK rate. Depends on what bracket you're in though. Obviously if you're going to be there for any length of time you would move your tax home to the UK from Canada.

I'm not sure what you mean by "social insurance" as you only get your pension once you're in mid-sixties usually. CPP contributions in Canada count for nothing in the UK and probably not in any other EU country. You will get your CPP based on your Canadian contributions but if you move to the UK you have to start from scratch with National Insurance.

If you then move back to Canada, when you hit 65 you don't receive cost of living adjustments on your UK State Pension because the social security agreement between Canada and the UK is virtually non-existent. If you move to another EU state (or Switzerland) you will receive COLAs, but the money comes from the UK. At the moment that could be a problem as the UK doesn't use the Euro, but I suspect they will in a few years time, so I wouldn't worry about it if you're a long way off retirement.

The one big advantage the UK does have over Canada in this respect is that if you contribute to NI for at least three years you can make voluntary Class 3 NI contributions for as long as you want after you leave, so effectively you would end up with two pensions rather than one. If you contribute for at least 30 years you get the full pension, but like I said you don't get cost of living adjustments. But say you work in the UK for 10-15 years it usually is worthwhile to carry on doing voluntary contributions after you leave, even without the COLAs it's still a pretty good payout at the end.