Taxes and Retiring to the UK from Canada

mab
New Member



Joined: 04 Aug 2008
Posts: 3
Location: Canada

Posted: Mon Aug 04, 2008 8:48 am

 

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We have elderly parents in the UK and are planning on retiring to Cornwall to 'help out.' As retirees in Canada we can income split our pensions which brings our income tax burden to approx. 15%. The Canadian withholding tax is 25%, at source, on monies that leave Canada. Is there any way we can reduce this 25% so our income tax burden, when we are living in the UK, will be more in line with the tax we pay in Canada? Hoping that someone can help us with this. Would love to hear from any others who have retired from Canada to the UK.

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Steven
CanuckAbroad VIP



Joined: 28 Sep 2007
Posts: 1676
Location: Calgary

Posted: Mon Aug 04, 2008 9:29 am

 

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You should be able to claim a foreign tax credit in the UK for tax paid in Canada, not sure that helps much in this situation though as you have no UK source income from the sounds of it.

Have a talk to the non-resident dept. in Notts. as they will be more familiar with any tax treaty provisions you may benefit from: http://www.hmrc.gov.uk/cnr/

I'm not sure on pension income but there may be a tax treaty provision that prevents the withholding if you become resident in the UK (or it may be a lower rate). However in that case you would have to pay UK income tax on pension income. The basic rate is 20% although I'm not sure how pension income is taxed, there may be credits. Depends on your age too.
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Steve.

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mab
New Member



Joined: 04 Aug 2008
Posts: 3
Location: Canada

Posted: Tue Aug 05, 2008 4:17 pm

 

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Thanks for the info Steve. This has got me looking at both the UK and the Canadian government sites - a bit more work to do yet to find out all but will share it once I know.

Thanks again.

MAB

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klynch
Junior Member


UK & CANADIAN TAX

Joined: 07 Feb 2008
Posts: 17
Location: Cheshire

Posted: Fri Aug 08, 2008 7:38 am

 

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It may be possible to reduce the withholding if the rate specified in the double tax agreement is less than 25%. You can recover excess tax by completing Form NR7-R. You may also have the option of filing a Canadian tax return and making a sec 217 election that sometimes can be beneficial for non resident pensioners.

I am a UK chartered accountant and Canadian CGA practicing in the UK. Check my website at lynch.pro. My fees are reasonable and I can help with filing Canadian and UK tax returns.

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mab
New Member



Joined: 04 Aug 2008
Posts: 3
Location: Canada

Posted: Fri Aug 08, 2008 8:25 am

 

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Thank you for your knowledge. This is basically what I am thinking may work. I will check out your site.

Hope it is a good day in Cheshire. We're getting all your rain here in Canada - we've broken all records for summer rainfall this year!

MAB

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