UK tax's...when back home in Canada

[oldsnowman]

I will be applying for an Ancestry Visa for the UK and i was wondering, when i am not in the UK, do i still pay the UK tax's when i am back in Canada? i know i will have to tax if a have a house (which i will buy one day), and if i have a car, but if i have none of these things, once i have duel citizenship, is there on going tax's that i will have to pay as a British citizen?
thanks

[Steven]

You can only have one principal residence, you pay taxes based on where your principal residence is. The snag is that Canada is probably the toughest country in the world on deeming people resident for tax purposes so you have to make sure you do a comprehensive job of cutting your residential ties. The main things are things only a resident could get, such as a DL, healthcare card and so on. Other major ties include having a lot of stuff in storage for example, because it implies you're coming back.

You can own a house in Canada, but it cannot be your principal residence, which means it would be subject to capital gains tax. The UK does not recognize Canadian tax shelters like RRSPs or RRIFs which can cause a problem as well, because you can get hammered with capital gains tax and/or income tax on those too (the way it works in the UK primarily is through company pensions and ISAs, which are similar to TFSAs but with a higher contribution limit and still subject to income taxes usually).

You must also notify your bank(s) that you are non-resident for tax purposes, that is definitely one tie the CRA picks up on because otherwise the bank will send them a T5.

If you read CRA form NR-73 it will give you an idea how they determine your residency in Canada, but don't submit it to the CRA unless they ask you to otherwise you're just giving them ammunition against you. On your final T1 you state that you've left, the best idea is to leave on December 31st otherwise you have to reduce your deductions, exemptions etc. to the number of days you were resident in Canada that year.