Canadian company and resident status/tax liability for UK resident with tie to -

XXXXXX wrote:
Below is the result of your feedback form. It was submitted byXXXXXXXXX XXXXXXXXXXXXXXXXX on Monday, May 18, 2009 at 11:11:33 ---------------------------------------------------------------------------My_question_is: Applicable-to-other-jurisdiction question: In 2004 I left Canada for UK after accepting a UK job offer. I am currently a UK resident, I do have an EU passport.
Shortly before leaving Canada,  I had lost a job and thought of doing contract/consultancy, so I registered a
(one person) corporation. However, the company never took off the ground,
I managed to find a full time job (still in Canada).
After moving to the UK I severed residential ties to Canada by renting out my condo through a
Canadian agent, giving up my driver's licence and health card. I still have a
banking account there as I have the mortgage on the condo. I am now thinking of
applying for British citizenship. However, I never got to actually formally
dissolving my company, although the company is inactive. Upon my recent short
visit to Canada I learned that the company had been involuntarily dissolved by
the government due to failure to file tax returns .
 I am curious as to the legal
consequences of this dissolution, whether I can be pursued by the Canadian government and whether, (should I decide in the future to go back to Canada), there will be tax consequences of this (i.e. can Revenue Canada adopt a view that for tax purposes I have been a resident all along, as   I had a tie to Canada,
through the (inactive, unused) corporation. Any other surprises that may lurk out there
due to this negligence of mine ?
david ingram replies:
Because of Article 4(2)(a) of the Canada Great Britain Tax Convention, you are
clearly a resident of Great Britain for world wide tax purposes. 
I assume that you are filing your Canadian return under section 216(40 (this includes CRA forms T1159
and T776) and filed a proper departing Canada income tax return with form T1161.Of course, Because of Article IV, your Canadian rentals must be reported on your
UK tax return. Any tax paid to Canada on the rental WILL be a tax credit on your
UK SA100 tax return. You would answer "yes" to question 5 on page 2 of the return.
You will need to fill ion the foreign pages of course.
See the form at - will need to read the instructions in the guide see (TRG 3 in the index)
See the 31 page guide at The Canadian company is 99999 out of 100,000 no longer a problem.
It has been stricken from the record and is just not a factor any more unless it come
sup as part of some other investigation. If you are in the UK as described you are a
resident of the UK and only taxable on your world income in the UK.
Hope this helps
Remember who you get to do the returns if and when you transition back to Canada.

david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:
4466 Prospect Road
North Vancouver,  BC, CANADA, V7N 3L7
Cell (604) 657-8451 -
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Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office) expert  US Canada Canadian American  Mexican Income Tax  service help.
pert  US Canada Canadian American  Mexican Income Tax  service and help.
David Ingram gives expert income tax service & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
Phone consultations are $450 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or is to be returned to Canada or a phone consultation is in Canada. ($472.50 with GST for in person or if you are on the telephone in Canada) expert  US Canada Canadian American  Mexican Income Tax  service and help.
This is not intended to be definitive but in general I am quoting $900 to $3,000 for a dual country tax return.

$900 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only (but were filing both countries) - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
$1,200 would be the same with one rental
$1,300 would be the same with one business no rental
$1,300 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
$1,600 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and you moved in and out of the country.
This is just a guideline for US / Canadian returns
We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $200.00 up. However, if you have a stack of 1099, or T3 or T4A or T5 or K1 reporting forms, expect to pay an average of $10.00 each with up to $50.00 for a K1 or T5013 or T5008 or T101 --- Income trusts with amounts in box 42 are an even larger problem and will be more expensive. - i.e. 20 information slips will be at least $350.00
With a Rental for $400, two or three rentals for $550 to $700 (i.e. $150 per rental) First year Rental - plus $250.
A Business for $400 - Rental and business likely $550 to $700
And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
Moving in or out of the country or part year earnings in the US will ALWAYS be $900 and up.
TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00 each.
18 RRSPs would be $900.00 - (maybe amalgamate a couple)
Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the Canadian return as a guide for seven years at a time will be from $150 to $600.00 per year depending upon numbers of bank accounts, RRSP's, existence of rental houses, self employment, etc. Note that these returns tend to be informational rather than taxable.  In fact, if there are children involved, we usually get refunds of $1,000 per child per year for 3 years.  We have done several catch-ups where the client has received as much as $6,000 back for an $1,800 bill and one recently with 6 children is resulting in over $12,000 refund. 

Email and Faxed information is convenient for the sender but very time consuming and hard to keep track of when they come in multiple files.  As of May 1, 2008, we will charge or be charging a surcharge for information that comes in more than two files.  It can take us a valuable hour or more  to try and put together the file when someone sends 10 emails or 15 attachments, etc. We had one return with over 50 faxes and emails for instance. 

This is a guideline not etched in stone.  If you do your own TDF-90 forms, it is to your advantage. However, if we put them in the first year, the computer carries them forward beautifully.

IRS Circular 230 Disclosure:  To ensure compliance with requirements imposed by the IRS, please be advised that any U.S. tax advice contained in this communication (including any attachments) is not intended or written to be used or relied upon, and cannot be used or relied upon, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.--

Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at or  If you forward this message, this disclaimer must be included." -


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