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Tax Tips for Canadians coming to the UK or Returning to Canada
For Canadians Relocating to the UK
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Understand Your Tax Residency Status
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Upon moving to the UK, you may become a UK tax resident depending on how many days you spend in the country.
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The UK uses the Statutory Residence Test (SRT) to determine tax residency. Review this carefully or consult a tax advisor.
Declare Worldwide Income
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As a UK tax resident, you’ll need to declare income from Canadian sources, including pensions, investments, or rental properties.
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Canada and the UK have a tax treaty to avoid double taxation, allowing you to claim foreign tax credits where applicable.
Pensions and RRSPs
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Canadian pensions, including CPP and OAS, may be taxed in the UK based on your residency status.
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RRSP withdrawals might be taxable in the UK; however, you can take advantage of tax treaties to avoid double taxation.
Owning Property in Canada
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If you keep property in Canada, rental income must be reported to the Canada Revenue Agency (CRA).
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You may also need to report this income in the UK, but foreign tax credits can offset potential double taxation.
Offshore Tax Exemptions
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The UK has a “remittance basis” option for non-domiciled residents. This allows you to pay tax only on UK-sourced income or foreign income brought into the UK.
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This option may be beneficial, but consult a tax professional, as it may require additional fees or reporting.
National Insurance Contributions (NIC)
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You may need to start paying NIC in the UK. This contributes to benefits like healthcare and state pensions.
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Consider how this aligns with your existing Canadian CPP contributions.
For Canadians Returning to Canada from the UK
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Tax Residency upon Return
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Once you return to Canada, you will generally become a Canadian tax resident again and must report worldwide income.
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Inform the CRA of your change in residency and update your address.
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Declare UK Pensions
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UK pensions, including workplace pensions, may need to be reported as foreign income in Canada.
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The Canada-UK tax treaty can help avoid double taxation.​
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Selling Property in the UK
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If you sell property in the UK before or after your return, you may face capital gains tax in the UK.
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Check whether the CRA requires you to report any gains if the property was held after re-establishing Canadian residency.
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Offshore Accounts and Investments
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Declare any remaining UK bank accounts, ISAs, or other investments as part of your worldwide income when filing taxes in Canada.
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Consider transferring funds to Canada if it simplifies tax reporting.
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Carryover of Tax-Free Allowances
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The UK allows tax-free allowances for savings, investments, and income, which cease when you leave. Plan withdrawals or income before departing to maximize these benefits.
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Social Security Coordination
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Canada and the UK have a social security agreement, allowing contributions like NIC or CPP to count toward eligibility for state pensions.
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Ensure records are properly transferred to align benefits from both countries.
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General Tips for Cross-Border Tax Management
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Leverage the Canada-UK Tax Treaty
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The tax treaty prevents double taxation on income like pensions, property, and investments.
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Work with a tax advisor to ensure treaty benefits are applied properly.
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Maintain Detailed Records
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Keep documentation of income, deductions, and tax filings for both Canada and the UK.
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This is especially important if claiming foreign tax credits or exemptions.
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Plan Currency Transactions Carefully
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Converting large sums of money between CAD and GBP can result in significant exchange rate costs.
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Use financial platforms or expert advisors to minimize fees.
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Seek Professional Advice
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Cross-border taxation is complex and highly individual. Consult a tax advisor experienced in both Canadian and UK systems to ensure compliance and optimize your financial strategy.
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The 10 Point EXPAT Tax Checklist
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1. Determine Your Tax Residency Status
​Understand the UK’s Statutory Residence Test (SRT)
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2. Inform the Canada Revenue Agency (CRA)
Notify the CRA of your change in residency to avoid being taxed as a Canadian resident. Submit Form NR73 if required.
3. Understand Double Taxation Rules
Familiarize yourself with the Canada-UK Tax Treaty to avoid being taxed on the same income in both countries.
4. Review Your Canadian Pensions
Check how your CPP, OAS, and RRSP withdrawals will be taxed in the UK and how to claim tax treaty benefits.
5. Declare Worldwide Income in the UK
As a UK tax resident, you’ll need to report all income, including Canadian rental, investment, or pension income.
6. Explore UK’s Non-Domiciled Status
Determine if you qualify for the remittance basis of taxation as a non-domiciled resident to limit tax on foreign income.
7. Evaluate Canadian Property Ownership
Decide whether to rent, sell, or keep Canadian properties. Rental income must be declared in the UK and to the CRA (if non-resident).
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8. Plan Currency Transactions
Minimize costs by planning large CAD-to-GBP transfers strategically and exploring foreign exchange platforms for better rates.
9. Check Social Security Contributions
Understand how National Insurance Contributions (NIC) in the UK interact with your CPP under the Canada-UK Social Security Agreement.
10. Seek Professional Cross-Border Advice
Consult with a tax advisor experienced in both UK and Canadian tax systems to ensure compliance and maximize tax efficiencies.
