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Where Taxpayers and Advisers Meet

Tax on Canadian Investments

mike_302
Posts:17
Joined:Sun May 06, 2018 10:18 am
Tax on Canadian Investments

Postby mike_302 » Sun May 06, 2018 10:34 am

Hi all,

I've been working hard over the last year to understand and properly report the earnings on my Canadian investment, as a Canadian living and working in the UK indefinitely. Notably, I am not bothering with the remittance basis, and simply opting to report everything and pay on the arising basis, because of the uncertainty of staying and because for the most part, I fall under the various personal allowance limits...

In Canada, I have changed my status for tax purposes to non-resident -- so I don't file taxes there, and my investments withhold 15% on my dividend earnings (filled in the forms to get the UK tax-treaty rate).

In the UK, the first year, I only had dividends to report, and then I simply added up the total amount of cash that was withheld (I got this from a spreadsheet provided by my broker) and the total amount that I received in cash (i.e. I did not include the total that went into the Dividend Reinvestment program for the related funds), and reported these as tax paid and foreign income, respectively.

This time, I have some capital gains, and I may do again next year. Both capital gains amounts will be under the personal allowance of £11,700 for capital gains. The gains are on stocks and ETFs traded on the Toronto Stock Exchange.

To keep this query short now: I will work to figure out how to calculate and report the numbers correctly, but I would like to know what the right answer should be at the end of the day. Will I really not owe any tax on these capital gains, so long as the gains are under £11,700? In other words, assuming no other foreign income (forget the dividends and interest), would my tax-owing be £0?

Thanks a bunch.

DavidTreitel
Posts:271
Joined:Thu Aug 16, 2012 4:31 pm

Re: Tax on Canadian Investments

Postby DavidTreitel » Mon May 07, 2018 1:20 pm

Why do you believe all of the gains qualify for the UKs CGT exemption? Are any investments in mutual funds and ETFs held in UK reporting or non-reporting funds?

mike_302
Posts:17
Joined:Sun May 06, 2018 10:18 am

Re: Tax on Canadian Investments

Postby mike_302 » Mon May 07, 2018 5:18 pm

I suppose I just assumed that Capital Gains Tax allowance meant what it sounded like, and didn't consider the possibility of any fine print -- but yes, the Canadian investments are held in ETFs that I believe are non-reporting in the UK (I did a quick check on the reporting/non-reporting status a few months ago), and some in big-name stocks (don't know if they're UK-reporting).

What implications does this have?

mike_302
Posts:17
Joined:Sun May 06, 2018 10:18 am

Re: Tax on Canadian Investments

Postby mike_302 » Mon May 07, 2018 5:38 pm

I suppose I just assumed that Capital Gains Tax allowance meant what it sounded like, and didn't consider the possibility of any fine print -- but yes, the Canadian investments are held in ETFs that I believe are non-reporting in the UK (I did a quick check on the reporting/non-reporting status a few months ago), and some in big-name stocks (don't know if they're UK-reporting).

What implications does this have?
Apologies, I'm all caught up on this now -- I think... I just read this summary: https://www.taxinsider.co.uk/556-Offshore_Mutual_Funds_and_Capital_Gains_Tax.html

Looks like it will be very important/valuable to check if my funds are or are not in fact reporting...

This is rather unfortunate... That's what I get for not being rich enough, I suppose! Some of the gains are even in a Canadian tax-free account, but I know that's not recognised in the UK (the Canadian tax-free account) so I have to pay on that.

Out of curiosity, is there anything I can do / record I can keep -- in case I didn't live here for 7 out of 9 years, and wanted to claim back the tax paid, because I am not bringing the money to the UK? Or any other tips or hints on this matter?


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