WIRE OPENAn archive editionSEARCHARCHIVERSS
EST. 2000
UKTECH
THE IT-CONTRACTING & TAX RECORD
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Working in Canada

Well, I've never had to ask a question here before because normally the answer has already been posted. But on this occasion I'm just too confused!

Here's my situation:

I'm going to be working temporarily in Canada as a permanent employee for a Canadian company from the middle of March. The tricky bit is that I don't know how long for - could be 12 months, could be 4 years.

I contract through a limited company. Not IR35 caught. I've already looked into options for my company and I'm currently favouring the idea of winding up and using taper relief. Even if I decide to contract when I come back to the UK, a clean slate is quite appealing... so many things I'd do differently...

I've looked into the tax situation in Canada and it seems to me that it would be most efficient if I could remain a UK resident for tax purposes for as long as possible. This is mainly because my income in Canadian dollars converted into GBP would attract less tax in the UK. Also, I understand that NI is not due on overseas earnings. (I have not yet looked into any NI equivalent in Canada or other taxes that would not be rebated).

My question is, at what point will Canada start considering me resident for tax, at what point will the UK stop considering me resident for tax and what happens when they both consider me resident for tax - who wins?

The Canadian tax year very sensibly runs Jan-Dec. But does this mean they could demand tax for my income in the UK for the 3 months before I arrived in Canada?

The issue of overlapping tax years confuses me so much that I don't even know what question to ask. :)

I appreciate that attempting to treat the UK as a tax 'haven' is probably not a common scenario so thanks for your help! ;)

-- tdaplyn

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