Any Canadian severed ties with Canada to become Indian resident ?

eater · May 27th, 2007, 19:29

I am wondering if it is worth severing ties
with Canada (as permanent resident of Canada),
- nothing to do with Canadian Citizenship.(Still
maintain Canadian citizenship, passport etc.)

By becoming an Indian resident (rather than be
a Canadian resident), one of the implication
is that the Indian govt claims any tax on Canadian
income (including pension income).

The Canadian Govt would withhold a minimum tax
that can be refunded after showing that the Indian Govt.
has taxed that income.

Am I right in this thinking?....Anyone out there
who has done this or investigated and decided against
change of residency --- would indeed appreciate your
thoughts, experiences, ideas........

Any UK citizens having severed residency ties with UK and
become Indian residents? Would appreciate your input as well...
Do you now pay tax on your British pension/ British income here in India?
Does income tax office in UK withhold tax from your UK pension / UK income?

Txs.....for your input..

Nick-H · May 27th, 2007, 21:23

This is an enormously complex subject!

But it is, as far as UK is concerned, something that happens or doesn't happen, according to how long you spend in UK/India. I've informed the UK tax people that I have been 'residing' in India, without setting foot in the UK, since last June, and that any visits I make to the UK will be in the nature of short holidays, not exceeding a few weeks every few years.

On doing my 2006 tax return last year, and struggling through the 'multi-choice exam' on the appropriate forms, it appeared that I had not been out of UK for sufficient length of time top be considered a non-resident at that point. My tax liability for the year was nil (to UK) anyway.

But, as far as I know, I'm still subject to British income tax on my earnings within Britain, which is some pension and bank interest.

As the British tax threshold, personal allowances, etc, are much higher than the Indian ones, I would much rather be assessed for and pay UK tax on that income.

I have to pay Indian tax on income above the Indian threshold on earnings in India. UK and India have a no-double-taxation agreement, and I will not be required by one to pay tax on income already taxed by another.

I'd like to consult an expert, but I'd first have to find one, and, if I go to one of the big international accountancy firms it'll probably cost me several months living budget just to walk in the door.

eater · May 28th, 2007, 00:10

Quote:

Originally Posted by Nick-H

I'd like to consult an expert, but I'd first have to find one, and, if I go to one of the big international accountancy firms it'll probably cost me several months living budget just to walk in the door.

Thank you Nick-H, appreciate your, as expected, a through understanding of the tax system....UK/India and Canada/India is about the same....in terms of tax agreements between the two countries...

I did a search re Canada/India and yes I agree with you the best thing at this time is to pay the tax over there for Canadian "income" (pension) and "if" any Indian income pay tax here.

Going to an accountant "international" firm.....as you say is likely to be TOO MUCH dinero.....I went once to one of those, and the accountant's bill was more than my tax for the year!! I'll stick to the "freebies" for now....unless the pension goes up !!

Buy you a beer...hell two beers the next time you are in Mumbai

Nick-H · May 28th, 2007, 00:47

'Thorough' --- I'm sure I don't deserve that. If I could remember all the stuff on that form....

Anyway, I come cheaper than a beer or two; a chai or two will do me just fine

Aaron-R · May 28th, 2007, 01:50

Hi Eater, I've been reading this site for months in anticipation of a soon to be coming relocation to India (Delhi), and as I am from Canada, have been doing a lot of research on the whole tax thing. I could try to explain it all here, but it is probably easier to check out this site, they give some good Canadian-Expat specific advice on tax things. http://www.expat.ca/tax_advice.htm
Personally I am opting to give up my Canadian residency for tax reasons, I will pay almost half the tax in India than I would in Canada, (I will be in Delhi for about 2 years).
There is a form to fill out should you choose to go the same route as me, I'll try to attach it here but i'm new to IM so if it doesn't work you can ind it on the Canada Revenue site http://www.cra-arc.gc.ca/ - the form is called nr73-04e (Leaving Canada). Hope this helps.

salahk00 · Nov 4th, 2008, 17:48

Hi Aaron,

Have you moved to India yet. If yes, are you still sure that the Tax in India will be half of what you would pay in Canada.

Please upddate us with your new findings.

I am starting to do my research on this. I am Canadian working in India now.

Regards.

Nick-H · Nov 4th, 2008, 19:36

Aaron hasn't been back since June --- but you might be lucky, he might drop in, or someone else might help.

May 27th, 2007, 19:29	#1
eater Senior Member Join Date: Aug 2004 Location: Mumbai presently, previously Canada Posts: 431	Any Canadian severed ties with Canada to become Indian resident ? I am wondering if it is worth severing ties with Canada (as permanent resident of Canada), - nothing to do with Canadian Citizenship.(Still maintain Canadian citizenship, passport etc.) By becoming an Indian resident (rather than be a Canadian resident), one of the implication is that the Indian govt claims any tax on Canadian income (including pension income). The Canadian Govt would withhold a minimum tax that can be refunded after showing that the Indian Govt. has taxed that income. Am I right in this thinking?....Anyone out there who has done this or investigated and decided against change of residency --- would indeed appreciate your thoughts, experiences, ideas........ Any UK citizens having severed residency ties with UK and become Indian residents? Would appreciate your input as well... Do you now pay tax on your British pension/ British income here in India? Does income tax office in UK withhold tax from your UK pension / UK income? Txs.....for your input.. __________________ Just happy to be here.........

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May 27th, 2007, 21:23	#2
Nick-H This is just a cameo appearance Join Date: Oct 2004 Location: Chennai, India Posts: 36,189	This is an enormously complex subject! But it is, as far as UK is concerned, something that happens or doesn't happen, according to how long you spend in UK/India. I've informed the UK tax people that I have been 'residing' in India, without setting foot in the UK, since last June, and that any visits I make to the UK will be in the nature of short holidays, not exceeding a few weeks every few years. On doing my 2006 tax return last year, and struggling through the 'multi-choice exam' on the appropriate forms, it appeared that I had not been out of UK for sufficient length of time top be considered a non-resident at that point. My tax liability for the year was nil (to UK) anyway. But, as far as I know, I'm still subject to British income tax on my earnings within Britain, which is some pension and bank interest. As the British tax threshold, personal allowances, etc, are much higher than the Indian ones, I would much rather be assessed for and pay UK tax on that income. I have to pay Indian tax on income above the Indian threshold on earnings in India. UK and India have a no-double-taxation agreement, and I will not be required by one to pay tax on income already taxed by another. I'd like to consult an expert, but I'd first have to find one, and, if I go to one of the big international accountancy firms it'll probably cost me several months living budget just to walk in the door.

May 28th, 2007, 00:47	#4
Nick-H This is just a cameo appearance Join Date: Oct 2004 Location: Chennai, India Posts: 36,189	'Thorough' --- I'm sure I don't deserve that. If I could remember all the stuff on that form.... Anyway, I come cheaper than a beer or two; a chai or two will do me just fine

Nov 4th, 2008, 17:48	#6
salahk00 Member Join Date: Sep 2008 Location: Toronto Posts: 3	Hi Aaron, Have you moved to India yet. If yes, are you still sure that the Tax in India will be half of what you would pay in Canada. Please upddate us with your new findings. I am starting to do my research on this. I am Canadian working in India now. Regards.

Nov 4th, 2008, 19:36	#7
Nick-H This is just a cameo appearance Join Date: Oct 2004 Location: Chennai, India Posts: 36,189	Aaron hasn't been back since June --- but you might be lucky, he might drop in, or someone else might help.