Tax on income outside Canada

[njwilli3]

Hi i've been successful in obtaining a 2 year work permit for Toronto via a Labour Market Impact Assessment. I currently live in the UK and own the property I'm living in. When I move over to Toronto and I rent my property in the UK, will I be liable for Canadian tax on this rental income as a temporary worker?

 

[PMM]

Hi

Hi i've been successful in obtaining a 2 year work permit for Toronto via a Labour Market Impact Assessment. I currently live in the UK and own the property I'm living in. When I move over to Toronto and I rent my property in the UK, will I be liable for Canadian tax on this rental income as a temporary worker?

1. No.

 

[njwilli3]

Thanks for the reply.

How do you know for sure?

Is there an article online which explains it in a bit more detail?

 

[TempResident]

Hi i've been successful in obtaining a 2 year work permit for Toronto via a Labour Market Impact Assessment. I currently live in the UK and own the property I'm living in. When I move over to Toronto and I rent my property in the UK, will I be liable for Canadian tax on this rental income as a temporary worker?

The year you move into Canada you will be considered a part-time resident only for Canadian Tax Purposes, that means that you only be liable for Canadian Taxes on Income earned in Canada. However, if you continue residency (living in Canada) for a subsequent year, you will be considered a resident of Canada for tax purposes and you will be taxes on your worldwide income (including passive income in the UK). However, at that stage, you should look more closely into the Canada-UK tax treaties so you may be able to pay taxes only once and in one country only.

P.S. Resident of Canada for Tax Purposes doesn't have anything to do with your immigration status in Canada.

Cheers.

 

[njwilli3]

The year you move into Canada you will be considered a part-time resident only for Canadian Tax Purposes, that means that you only be liable for Canadian Taxes on Income earned in Canada. However, if you continue residency (living in Canada) for a subsequent year, you will be considered a resident of Canada for tax purposes and you will be taxes on your worldwide income (including passive income in the UK). However, at that stage, you should look more closely into the Canada-UK tax treaties so you may be able to pay taxes only once and in one country only.

P.S. Resident of Canada for Tax Purposes doesn't have anything to do with your immigration status in Canada.

Cheers.

Great thanks, makes sense. From what I've read about the treaty is that I will end up paying the higher amount, which means I'll pay tax first in the UK and then that will go as credit towards tax in Canada.

 

[canuck78]

Great thanks, makes sense. From what I've read about the treaty is that I will end up paying the higher amount, which means I'll pay tax first in the UK and then that will go as credit towards tax in Canada.

If you are living and working in Canada usually Canada gets paid first then UK gets paid second. There are definitely accountants that specialize in these treaties.

 

[njwilli3]

Thank you canuck78.

Do you recommend any accountants that specialise in this?

 

[canuck78]

Sorry don't. Not an uncommon situation although having to deal with the US and Canadian tax system is more common.