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bigduckontax
bigduckontax, Accountant
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MY SISTER IN LAW WAS RESIDENT IN CANADA YEARS DURING

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MY SISTER IN LAW WAS RESIDENT IN CANADA FOR 31 YEARS DURING WHICH SHE BECAME ENTITLED TO A CANADIAN STATE PENSION. SHE ALSO CONTRIBUTED TO AN OCCUPATIONAL PENSION WHILST IN EMPLOYMENT.
SHE AND HER HUSBAND RETURNED TO THE UK IN 2012 AND BECAME NON RESIDENT IN CANADA FOR TAX PURPOSES. DURING THE CANADIAN TAX YEAR 2014 THE OCCUPATIONAL PENSION BECAME AVAILABLE FOR CASHING IN. THE PENSION COULD NOT BE REMITTED TO HER UK BANK AND WAS KEPT IN AN ACCOUNT IN CANADA WHICH HAD REMAINED OPEN.
ON COMPLETION OF THE CASHING IN SHE RECEIVED FROM THE CANADIAN REVENUE AGENCY A FORM NR4(14) SHOWING AN AMOUNT OF $(CAN) 48729.77 OF WHICH $(CAN) 10961.75 HAD BEEN WITHHELD IN TAX AS SHE WAS NOW NON RESIDENT IN CANADA.WHAT WOULD BE THE POSITION IN TERMS OF THE RECIPROCAL TAX ARRANGEMENT WITH CANADA REGARDING RECLAIMING THE TAX DEDUCTED ?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer and pleased to be able to help you with your question. Any Canadian tax refund following her non residential status must be made by the Canadian Revenue Agency (CRA). It cannot be done by HMRC. However, the tranaction may attract UK Taxation as, if she is resident in the UK for 183 days in the tax year in which the sum was payable, then she is liable to UK Taxation on her world wide income. However, in that case, under the Double Taxation Treaty between the UK and Canada which precludes the same income stream from being taxed in both jurisdictions, then any tax paid to the CRA would be allowed as a tax credit against her UK tax liability. The Treaty does not, however, protect the individual from differences in rates of taxation. I do hope that I have been able to shed some light on your Sister-in-Law's Situation.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.

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