PLEASE HELP with TAX!!

Hi!

I have left Canada since April 2005. I was on a working holiday visa. I worked from June 2005 until June 2006. I stayed until April 2007 to travel and went back to Canada after my visa ran out only to come back to the UK 5 months later on a fiance visa. Ive been married for over a year now and am waiting to apply for my residency next year.

Ive applied to check if I was still considered as a canadian resident. The answer was that Im a "resident de fait" because I still have strong links like a driver's licence, a bank account and a house under my name in Canada. ( a house which is only under my name, as my parents are living there and paying for it)

Now that you know my situation I need someone to help me about my Tax in Canada. Ive received a letter from the Canadian Government to ask me to send them a T1-2006. Since I left, I forgot about doing anything about my tax!! I thought once you leave the country, you dont need to worry!! Anyway, now they are asking me to send them a T1-2006. But the whole of 2006 I was living in the UK.

My question is: When I fill up the T1, do I have to put the income that Ive got from Jan 2006 until June 2006 only? Im sorry, but Ive never had to do that before! My family use to hire someone to do it for us. Now Im on my own as its a different situation and Im struggling to fill up these forms!!

Can anyone help me? Or is there anywhere I could go to for some more help?

Any advice would be appreciated!

Thank you so much!!

Laydy

It's hard to say because it's not clear what your residency status is.

From the sounds of it the CRA have decided you were resident the whole time, so in that situation you have to declare all your income to the CRA for the whole time you were in the UK, claim a foreign tax credit for any tax you paid in the UK and pay the difference (if any) to the CRA. There probably will be a difference because I don't think you can claim NI contributions in the UK as a foreign tax credit in Canada.

The general guide for the T1 explains how to claim foreign tax credits.

My personal feeling is that if you're married to someone in the UK and you live in the UK then you ceased to be a tax resident of Canada at that point, but you'd have to get a ruling from the CRA using Form NR-73 to confirm that. But really you need to sever residential ties to Canada if you haven't already, you're just making life difficult for yourself. You can own property in Canada, it just can't be your principal residence, but you need to get rid of the DL and anything else only a resident could get.

The date you got married would be the date you left for tax purposes, which you would put on your final T1, whatever year that was, (2007?)

Assuming the CRA agrees, they may not. If they don't it's time to hire a lawyer.

Thanks Steve for the reply and advices!

According to the NR-73 form, im still considered a canadian resident because of my strong links with Canada ( my house, DL, bank account,etc) Im in the process of cutting out the ties, but I still have the headache of filling up the T1 for 2006. If I havent worked in Canada the whole of 2006, can I just put 0$ everywhere?? Same thing for the federal tax and stuff? Can I just put 0$ everywhere?? I know that I have to put something in for foreign revenue. All I have from that year is my p60 and it tells me what I've earned from April 2005 until 2006. Do I have to put that amount or do I have to make out how much Ive made from Jan 2006 until June 2006?

Im sure it can sound so simple for others, but to me its a headache!! I have the T1 in front of me and Its just non-sense! The part where I have to put my name and address is crystal clear to me, as for the rest of it I dont understand anything!!! Its just lots of lines and numbers and annexes to choose from...:s Im trying my best with the T1 guide online, but it seems like im going nowhere!

I just dont see the point in all this!! Who invented taxes anyway! Its so complicated! I still need to wait another 2 years before I can apply for my UK residency. Does anyone know if I will still need to bother with the CRA in the future? I just want to leave Canada and have nothing to do with the tax out there. Im happy to pay tax only in one country!

Anymore advice would be very much appreciated!

Anyone in the same situation or heard of someone having the same headache?!

Thanks guys!

You have to report your income for 2006 on the T1 return for 2006. As you were a resident that year, it means all of your income from any source. UK, bank interest, etc. What it says on your P60 isn't terribly relevant because the UK tax year is different. You need to actually work it out from pay slips, etc. for the calendar year of 2006. Then you convert it into Canadian dollars using the tool on www.bankofcanada.ca

You also have to calculate how much income tax you paid (i.e. minus NI), if you have a UK bank account and didn't file an R105 there is UK income tax withholding on any UK bank interest you received (the bank can usually tell you what it was). You add it up, convert it into Canadian dollars and that's what you're claiming as your foreign tax credit.

I can't tell you off-hand which boxes on the form to put it in but the T1 guide is pretty straightforward, you need T2209 for sure.

From the sounds of it you might be better off finding an accountant in the UK who is familiar with Canadian taxes, there have been a couple who've posted on here.

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