[jamin589]

Hi there,

I have recently moved to BC as a permanent resident, but I am still being paid in the UK on a self employed basis as an online contractor.

I am extremely confused about taxes.. I understand that there is a tax treaty between UK and Canada, but I am unsure who I should pay taxes to, and how/if I can become exempt from paying taxes in either country. I moved to BC at the end of August this year.

Any help or explanations would be very much appreciated!!

Thanks in advance,

Ben

 

[Nerd Investor]

We can give you some general guidelines, but honestly you're going to want to sit down with a good account and go through your exact situation. Whether the UK gets to tax any or all of your business income will depend on whether you were working through a permanent establishment located in the UK. If the answer is yes, your business income will be taxed in the UK, you will report it and be taxed on it in Canada, but then apply taxes paid in the UK to reduce your taxes in Canada. If the answer is no, you'll just file taxes in Canada but may have to file some kind of Treaty Election or form with the UK companies that pay you so that they don't have to withhold any taxes.

That's very high level on a go-forward basis. 2016 will be more complicated because you have to worry about reporting your partial year returns for both countries and pro-rate your income sources for the different periods of residency.