I would be grateful for some expert advice on what I hope is a straightforward point. My partner is a Canadian citizen but has lived in the UK for over 50 years apart from a year in the 90s when she bought a house in BC and lived in it for a year. She then returned to the UK to live with me and rented out her house. I am 100% satisfied that she is at present domiciled and ordinarily resident in the UK. Initially she completed her UK tax returns via an UK chartered accountant but her financial affairs have for several years been relatively simple and I have completed her returns for her online, following the pattern set by the firm of accountants. They, and I following their pattern, have declared the net rent of the Canadian house in her UK tax return and that rent has been taken into account by UK HMCR in assessing the small amount of tax she has had to pay. I am now a Canadian PR, though still resident in the UK until my house is sold. As part and parcel of my preparations to move to Canada I had a chat last Spring with a Canadian accountant and during the chat the issue of my partner's tax return came up. The advice I was given was that the procedure which her UK accountants adopted and which I then followed was wrong, that the rent should have been declared in Canada, and that what was now required was a full and frank disclosure to the Canadian tax authorities as a result of which she would probably have to pay back tax plus interest. That is easier said than done: I have been trying since the Spring to get her to unearth her records! However I now have to re-double my efforts because the date of her UK tax return is looming, raising the issue whether I should omit her Canadian rent from her UK tax return. So the questions I have been asking myself are: (1) was the advice I was given in my chat with the Canadian accountant correct? I assume it was but I want to double-check(2) if it was, what is the closing date for filing her Canadian tax return? (3) what is the Canadian tax year? (4) is she likely to be able to get any of the tax she has paid on the rent in the UK back from HMCR? (4) with interest? Any advice, particularly on issues (4) and (5), which concern the UK rather than Canada, would be much appreciated.
taxing rent on Canadian property
- Thread starter wowsers
- Start date
Does this mean your partner has not pay non resident tax (to Revenue Canada) on her rental income from her Canadian property since the 90s? If so, she must sort this out with Revenue Canada as soon as possible! The deadline for filing tax return is generally April 30 for individuals and June 15 for self-employed persons.
Many thanks Steaky. Your reply confirms what I feared. Nevertheless it was very helpful. Do I understand correctly that the declaration/return which is due by 30 April 2015 will be in respect of the 12 month period ending 31 December 2014? I appreciate that sorting out the past mess is something which she must tackle before 30 April 2015.