UK/Canada residency - ask international non-resident

My_question_is: Applicable to Another Jurisdiction or Multi-jurisdictions
Subject:        UK/Canada residency
Expert:         taxman at centa.com
Date:           Wednesday November 02, 2005
Time:           03:31 PM -0800
QUESTION:
Hello David,
International company I work for is closing its operations in Canada and is
transferring me to its UK office (with an expectation of a permanent move).
However, I intend to make an election under 45(2) that my principal
residence will remain in Canada. After having read your answers to relevant
questions, I understand that in case I make this election and report my
worldwide income to Canadian tax authorities, I will not be subject to any
capital gains on my residence when I am back (even if I return after a
period longer than 4 years). I intend to rent my residence while I am away
and will file taxes on rental income earned in Canada.
I also own some land in Canada which I expect should appreciate in value
while I am gone. I intend to keep banking accounts, driving licence, etc.,
which (I guess) will effectively make me retain my Canadian residency
status.
I understand that the taxes I will be paying on my income in UK are slightly
higher that those Canada would charge if I earned the same income in Canada.
Due to a tax treaty between Canada and UK I should avoid a double taxation.
David, my question is what additional taxes, deductions, additions am I
exposing myself to in this case?
Is there anything else I should take into account when making my decision?
Another question, if I buy a property in UK to live in it while working
there, would I be subject to any capital gain taxes when I sell that
property and move back to Canada?
Thank you for your help beforehand,
-------------------------------------------------
david ingram replies:
If you maintain all your residential ties, you may well be a factual
resident of Canada.  In this case, you would file a return as a resident and
instead of exempting your foreign income under a Treaty (which makes you a
non-resident) you would calculate a foreign tax credit putting the tax and
social security you paid  to the UK on line 431 and your foreign income on
line 433 of schedule 1 of your T1 General.
Since you can only have one principal residence for Canadian Tax purposes,
any second residence in the UK would be subject to CANADIAN capital Gains
tax on sale just as if you had a summer cabin at Sechelt of Lake Winnipeg or
a Ski Cabin at Whistler or Mount Tremblay.
Answers to this and other similar  questions can be obtained free on Air
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This from "ask an income tax and immigration expert" from www.centa.com
<http://www.centa.com/>  or www.jurock.com <http://www.jurock.com/>  or
www.featureweb.com <http://www.featureweb.com/> . David Ingram deals on a
daily basis with expatriate tax returns with:
multi jurisdictional cross and trans border expatriate problems  for the
United States, Canada, Mexico, Great Britain, the United Kingdom, Kuwait,
Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France,
Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia,
Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran,
India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba,
Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK,
GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas,
San Antonio and Houston Texas
Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration
Tips, Income Tax and Immigration Wizard Income Tax and Immigration Guru
Income Tax and Immigration Consultant Income Tax  and Immigration Specialist
Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist
expert preparer consultant expatriate anti money laundering money seasoning
FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions
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