filing income tax problem with residence status

[Cdnhollie78]

Hello,

I am getting no where fast and am starting to get quite frustrated... If anyone has any tips or can point me in the right direction, I'd really appreciate your help!!

How do I know if I am a resident, deemed resident, a non-resident, or factual resident of Canada? I've been reading the documents on the CRA website and I'm feeling so frustrated because how do I know which one I am?

I left Canada to come to the UK temporarily in May '07 and then went back to Canada in May '08 (I worked in the UK during this time and payed UK taxes - I have an ancestry visa). I then returned to Canada from May '08 to Oct'08 (worked in Canada during that time.. long story) then moved back to the UK in October '08 though I haven't severed my Canadian ties, still have my DL, Passport, Bank Acct and Credit Card - do not own any property or a car. My fiance and I are not too sure whether we will settle down here in the UK or back in Canada (he's a British citizen).

I started to fill out my income tax online and found that if I'm a deemed resident or non-resident then I cannot fill it out online. How do I determine my status? If I can't do it online, where can I go to have my taxes done for me? What happens if I leave my T1 information as my home address in Canada, thereby leaving my residence status as a resident of Canada (only asking this because I haven't severed my ties)? And what does tax treaty mean? As I know I have to declare my income that I received in the UK... I didn't mean to put this off for so long, I honestly didn't realize it would be this complicated. Now realize that I'm a complete idiot for thinking that!

If anyone can help, I would be truly grateful...

[Steven]

Lot of questions but from the sounds of you're resident in Canada for the 2008 tax year because you still have residential ties to Canada (the DL - the rest of the things you list there are not, provided you've told the bank you're non-resident for tax purposes). And you spent a fair amount of time in Canada as well.

So basically you file a T1 just as you always have and claim a foreign tax credit for the tax you paid in the UK. NI cannot be claimed, if I understand the UK-Canada tax treaty correctly, only the income tax. It can be tricky to work out because the UK tax year is different, but basically you just add it up from your pay slips for 2008 and convert it into Canadian dollars using the rates from www.bankofcanada.ca

If you want it chapter and verse, get a ruling from the CRA by filing an NR-73 with them, but if you still have a valid DL and you're a Canadian citizen who spent a fair amount of time in Canada last year and worked here, I'm pretty sure they'll consider you resident for tax purposes for 2008.

[Cdnhollie78]

Thanks for that Steve. Do I have to apply for the overseas tax credit? I was hoping I could do that at a later date.. it also seems if I do choose to do that, then the program i'm using, Ufile won't let me file my taxes. I don't know where else to do it. Also, do you know if I qualify to enter my foreign income under the "Income exempt under a tax treaty line"? I'm assuming I do and I'm hoping I can because if so my refund triples. But saying that, I want to make sure that I'm entitled to this...

[Steven]

You declare the income and claim a foreign tax credit for the UK income tax using T2209, iirc.

[klynch]

I am a UK Chartered Accountant and Canadian CGA practicing in the UK. I can help with all your UK and Canadian tax filing obligations and refund claims.

Check out my website at www.lynch.pro. Give me a call if I can be of help.

Kieran Lynch