Pros and cons of getting Canadian non residency status

[Mrsjones_2008]

Hi!
I am a Canadian living in the UK. I moved here in Jan 2008 and married my husband ( who is English) in December 2008. I do not have a canadian income, however i did work in Canada for the first 2 weeks of Jan 2008.

I've been told that I need to file a non-residency form to avoid paying taxes in both countries. Is this true even if I am not earning a canadian income? I'm not sure if it makes a difference, but my income is £24000.

The only reason that I am reluctant to become a non-resident is that my husband and I are planning to move back to Canada in about 10 years (I'm planning ahead!). Will this move be more more difficult ( for both myself and my husband) if I move back as a non-resident?

ANY help you could provide would be much appreciated as I have no idea what to do!

Thanks everyone!

Michele

[JohnSoCal]

Originally Posted by Mrsjones_2008

Hi!
I am a Canadian living in the UK. I moved here in Jan 2008 and married my husband ( who is English) in December 2008. I do not have a canadian income, however i did work in Canada for the first 2 weeks of Jan 2008.

I've been told that I need to file a non-residency form to avoid paying taxes in both countries. Is this true even if I am not earning a canadian income? I'm not sure if it makes a difference, but my income is £24000.

The only reason that I am reluctant to become a non-resident is that my husband and I are planning to move back to Canada in about 10 years (I'm planning ahead!). Will this move be more more difficult ( for both myself and my husband) if I move back as a non-resident?

ANY help you could provide would be much appreciated as I have no idea what to do!

Thanks everyone!

Michele

I did exactly what you are talking about. It was several years ago ( 1968 ) so the laws may have changed since then though I doubt it in this case. I was a non-resident Canadian citizen at the time ( I am now a US citizen ) living in Mexico with my wife and daughter who were Mexican citizens. We moved to Canada and had no problems. I entered as a returning citizen and my wife and daughter were able to enter as landed immigrants. We just arrived and the Canadian immigration issued temporary permits on the spot. When we were settled, we got permanent legal residence for my wife and daughter. There was never a question about my status. The landed immigrant status may no longer exist but your status should not change regarding moving back to Canada.

Fifteen months later we moved to the US. Our whole reason for going from Mexico - Canada - US is it was much easier to get Green Cards ( resident visas ) in Canada then it was in Mexico.

I strongly urge you to contact the Canadian consulate in the UK to get the official word.

[123me]

I have no answer for you, but am interested in your question. I will be moving to the UK this time next year and am wondering myself about paying taxes. Hopefully someone will be able to give you some good advice.

Originally Posted by Mrsjones_2008

Hi!
I am a Canadian living in the UK. I moved here in Jan 2008 and married my husband ( who is English) in December 2008. I do not have a canadian income, however i did work in Canada for the first 2 weeks of Jan 2008.

I've been told that I need to file a non-residency form to avoid paying taxes in both countries. Is this true even if I am not earning a canadian income? I'm not sure if it makes a difference, but my income is £24000.

The only reason that I am reluctant to become a non-resident is that my husband and I are planning to move back to Canada in about 10 years (I'm planning ahead!). Will this move be more more difficult ( for both myself and my husband) if I move back as a non-resident?

ANY help you could provide would be much appreciated as I have no idea what to do!

Thanks everyone!

Michele

[Punktlich2]

Originally Posted by JohnSoCal

I did exactly what you are talking about. It was several years ago ( 1968 ) so the laws may have changed since then though I doubt it in this case. I was a non-resident Canadian citizen at the time ( I am now a US citizen ) living in Mexico with my wife and daughter who were Mexican citizens. We moved to Canada and had no problems. I entered as a returning citizen and my wife and daughter were able to enter as landed immigrants. We just arrived and the Canadian immigration issued temporary permits on the spot. When we were settled, we got permanent legal residence for my wife and daughter. There was never a question about my status. The landed immigrant status may no longer exist but your status should not change regarding moving back to Canada.

Fifteen months later we moved to the US. Our whole reason for going from Mexico - Canada - US is it was much easier to get Green Cards ( resident visas ) in Canada then it was in Mexico.

I strongly urge you to contact the Canadian consulate in the UK to get the official word.

I'm not sure the Canadian High Commission can help you on this. There is some info available on the Internet. I filed Canadian and Quebec tax returns for years and then when I ceased work and began collecting a Quebec pension filed nonresident returns, which addressed the matter of nonresidence. That is a ffactual issue (dealt with in the UK-Canada tax treaty and by statute. For Canada, it seems to depend on your (non-)retention of links such as property, licences, family, visits, etc.

One thing you should think about is Canadian Pension contributions. There is no totalisation agreement between the UK and Canada but there is a treaty on non-duplication of contributions. If you have credits there, and perhaps a REER, you might want to consider how you can contrive to maximise future benefits. (The UK unilaterally denies COLAs to its NI recipients in Canada.) These are arcane and boring issues now, but not when you reach 65.

To return to your question: if you leave Canada for marriage with no present intention to return, you should not have to pay Canadian or provincial tax in your absence other than on Canadian income. It may sometimes be to the advantage of those with earned incomes from Canada (or income that can, perhaps via a Canadian company you establish, be recharacterised as 'earned') to contrive to get Canadian pension credits and perhaps REER accumulations.

Not simple, eh?

[Punktlich2]

Originally Posted by JohnSoCal

I did exactly what you are talking about. It was several years ago ( 1968 ) so the laws may have changed since then though I doubt it in this case. I was a non-resident Canadian citizen at the time ( I am now a US citizen ) living in Mexico with my wife and daughter who were Mexican citizens. We moved to Canada and had no problems. I entered as a returning citizen and my wife and daughter were able to enter as landed immigrants. We just arrived and the Canadian immigration issued temporary permits on the spot. When we were settled, we got permanent legal residence for my wife and daughter. There was never a question about my status. The landed immigrant status may no longer exist but your status should not change regarding moving back to Canada.

Fifteen months later we moved to the US. Our whole reason for going from Mexico - Canada - US is it was much easier to get Green Cards ( resident visas ) in Canada then it was in Mexico.

I strongly urge you to contact the Canadian consulate in the UK to get the official word.

I'm not sure the Canadian High Commission can help you on this. There is some info available on the Internet. I filed Canadian and Quebec tax returns for years and then when I ceased work and began collecting a Quebec pension filed nonresident returns, which addressed the matter of nonresidence. That is a factual issue dealt with in the UK-Canada tax treaty and by statute. For Canada, it seems to depend on your (non-)retention of links such as property, licences, family, visits, etc.

One thing you should think about is Canadian Pension contributions. There is no totalisation agreement between the UK and Canada but there is a treaty on non-duplication of contributions. If you have credits there, and perhaps a REER, you might want to consider how you can contrive to maximise future benefits. (The UK unilaterally denies COLAs to its NI recipients in Canada.) These are arcane and boring issues now, but not when you reach 65.

To return to your question: if you leave Canada for marriage with no present intention to return, you should not have to pay Canadian or provincial tax in your absence other than on Canadian income. It may sometimes be to the advantage of those with earned incomes from Canada (or income that can, perhaps via a Canadian company you establish, be recharacterised as 'earned') to contrive to get Canadian pension credits and perhaps REER accumulations.

Not simple, eh?