Making a tax claim in Canada for UK income

dnaman
New Member


In Surrey

Joined: 30 May 2008
Posts: 5
Location: Toronto

Posted: Thu Jul 17, 2008 8:38 am

 

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Hi All,

I've read through some of the tax postings here and am getting an idea of how taxes work here. Basically, I am starting work in the UK next week and will be in the 40% tax bracket based on my gross income. I understand that I will be paying 40% tax on anything over 36,000.

That part is fine. My question is, since I may be going back to Canada in 6-7 months, how do i claim the taxes on my 2008 Canadian Tax Return? I've earned CDN income for the first 6 months of the year but for the next 6 months, I will be earning UK income and paying UK taxes.

I certainly don't want to be taxed twice (if thats even possible) and I'd like to know the best way to approach this and how to calculate how much tax i'll ultimately be paying and to whom.

Much thanks in advance.

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Steven
CanuckAbroad VIP



Joined: 28 Sep 2007
Posts: 1122
Location: Calgary

Posted: Fri Jul 18, 2008 10:07 am

 

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Read this: http://www.hmrc.gov.uk/cnr/faqs_general.htm#1

I think I might have put some duff information up on here in the past so my apologies to anyone who followed it, but long story short, get hold of the non-resident dept. in Nottingham. You are a non-resident because your tax home is Canada.

Anything you can't avoid paying in the UK you can claim a tax credit for in Canada under the terms of the tax treaty. (Assuming the Canadian rate is the same or higher).

File Form R105 with any UK bank to avoid withholding on bank interest. Remember to file a P85 when you leave.
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Steve.

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klynch
Junior Member


UK & CANADIAN TAX

Joined: 07 Feb 2008
Posts: 13
Location: Cheshire

Posted: Tue Jul 22, 2008 7:10 am

 

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I am a UK chartered accountant and Canadian CGA. I offer a UK and Candian tax service to expats. Check out my website at lynch.pro

Looks like you will continue to be considered a resident of Canada for tax purposes because your stay in the UK is short term and you retain significant ties with Canada during your absence.

You will be taxed in Canada on worldwide income, including your UK salary. You will get a tax credit for the UK tax you have suffered on the UK salary.

I find that nearly all my Canadian clients who spend sometime working in the UK end up paying too much UK tax. It will be worthwhile filing a UK return and applying for a refund when to leave.

Get in touch if I can be of help.

Kieran Lynch

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