PART II - I made an Error re UK NI payment from Canada

  Thanks to Frank N for this.
  Dear David Ingram 
  The advice you gave regarding paying into UK National Insurance needs correction. 
  In most cases, someone who has lived in the UK and worked there for at least 3 years then moved to live in Canada or any other country can pay Voluntary UK National Insurance Contributions from Canada or the other country. Such payments increase the number of qualifying years and therefore the UK retirement pension. One year's worth of voluntary contributions at the Class 3 rate is returned in the form of an increase in pension in 3 to 4 years following age 65 for men, or an earlier age for women. If a person is employed in Canada the the much lower Class 2 rate may be paid (since 2000) in which case one year's worth of contributions are returned in just over a year's worth of increased pension. If a man has already paid contributions for 44 years (may be changed to 30 years in 2010) he should not continue paying voluntary contributions as his pension will have reached the maximum. 
  My advice would be that the persons download leaflet NI38 (Social Security abroad - National Insurance contributions, Social Security benefits, Health care in certain overseas countries) from and complete and send in form CF83 (Application to pay National Insurance contributions abroad) which is found in the leaflet. 
  See also 
  Begin forwarded message: 
  From: US / Canada Income Tax Help - CEN-TAPEDE <centapede at> 
  Date: 2007 March, 01 18:53:24 GMT-08:00 
  To: CENTAPEDE <centapede at>, webmaster at 
  Subject: US USA / CANADA Income Tax Help - UK National Health and Canadian Pensions for new Canadian - David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico family, estate, income trust trusts Cross border, dual citizen 
  Reply-To: taxman at, centapede at 
  Dear Sir, 
  My wife and I each have 10 years worth of National 
  Insurance paid with UK and we are planning to move to 
  Toronto permanently. What do you recommend we do ie. 
  continue to pay UK National Insurance or stop paying 
  What is the pension system in Canada like? What should 
  we know before we get there? We are both 40 years old 
  and kind of late in our pension arrangements... 
  We plan to buy a house in Toronto in the range of 
  $250,000 with a down payment of %10 to %15. What kind 
  of salary range would they require for that? 
  I work for a US cruise company and my salary is 
  tax-free. Will I have to pay tax once I move to 
  toronto? I will not be spending more than 4 months a 
  year for the first 2 years in Toronto. 
  Thank you kindly for your answers 
  david ingram replies: 
  Canada has two government pensions: 
  The Canada Penison plan covers workers  who put in approxiamately 5% of their income up to $40,000 if an employee and 10% of their net income if self employed. One can start withdrawing it at age 60 at the earliest of age 70 at the latest.  To get a full penion, one has to contribute at the maximum for 40 years.  Therefore, if you put in until age 70, the most you would receive is 75% of the maximum pension. 
  We also have the Old Age Security pension which one receives for being alive and being a resident of Canada.  It can start at age 65 and also requires 40 years ofr esidence in Canada.  In your case, you would receive 25/40's of the pension .  It also has a means test attached and some of it starts getting claweed back at about $60,000 of income and it disappears entirely at about $85,000 of income in 2006 dollars.  Those figures will be wite different 25 years from now. 
  You can no longer pay into the UK National Insurance as a resident of Canada. 
  There are all sorts of possibilities depending upon the prevailing interest rate and whehther the purchase qualifies for CMHC financinag and gurantees to teh lender..  In general, you wopuld need about $55 to 60,000 of income to justify a new purchase as described. 
  Once you become a resident of Canada with a home available to you, you can expect that Canada will tax your cruise ship income. Goto andread the US/Canda taxation section in the seconbd box down on the right hand side.  There are lots of examples there showing how Canada taxes its residents and citizens. To escape this, you would have to have a full blown home in another country where you spent more than 183 days of the year. 
  david ingram wrote: 
  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 - 
  (604) 980-0321 Fax (604) 980-0325 
  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) 
  email to taxman at 
  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 If you forward this message, this disclaimer must be included." 
  Be ALERT,  the world needs more "lerts" 
  David Ingram gives expert income tax & 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 $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada. 
  This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return. 
  $800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year. 
  $1,000 would be the same with one rental 
  $1,200 would be the same with one business no rental 
  $1,200 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. 
  $1,500 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 
  $1,600 would be for two people with income from two countries 
  $2,800 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 $150.00 up. 
  With a Rental for $350 
  A Business for $350 - Rental and business likely $450 
  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 $800 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. 
  Just a guideline not etched in stone.  
  This from "ask an income trusts tax and immigration expert" from or or 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, 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 Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention 
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