Tie-breaker clause of UK-Canada Tax treaty

[SusanneK]

I am a Canadian living and working in the UK (for 2 years now) and am considered a tax resident of the UK. However, by virtue of several secondary residential ties in Canada (bank acct, credit card, professional registration, RRSP, mutual funds, car left with my parents) I am also likely considered a resident of Canada.

I wondered if you could give me some clarification on the term "permanent home" in the tax treaty? I have no permanent home in Canada (as I gather staying with parents doesn't count) and in the UK I live in a rented flat with my unmarried partner). My name didn't go onto the lease agreement with his until almost a year after I had moved in with him. I assume that this still qualifies as my a "permanent home available to me" -can you confirm.

If not, presumably my centre of vital interests is in the UK as its where I work, live, and have healthcare.....?

Thanks - all this conflicting information on residency determination floating around on the internet makes me nervous!

[nelsona]

By treaty, you cannot be resident of both countries, that is why the residency clause is called a tie-breaker.

Centre of vital interests determines residency. regardless of how many secondary ties you have in canada, ad long as you meet UK tax residency, and live/work in UK, you are UK resident, and this would be from the moment your situation changed such that your would be MORE UK that Cdn resident, ie. the day you moved.

For treaty countries, passport, club memeberships, cars, DL, etc are meaningless. life, work, home, spouse outweigh all these things.

File your 2009 taxes in canada as a departing resident and be done with it.

There ins no conflicting information in the treaty -- but I understand, since I've been trying for 12 years to get people to understand this notion.

[SusanneK]

thanks - I plan to file non-resident. I agree, the tax treaty seems straight forward, my anxiety has come from seeing multiple different interpretations of the how to determine residency floating around on the internet, and hearing stories about the CRA questioning residency status years after moving back to Canada and suing people for huge amounts of back taxes and penalties (which in my case would probably bankrupt me). I understand that a lot (all?) of the precedent setting cases have occured where people have gone to non-treaty countries; HAVE YOU HEARD OF any cases of the CRA questioning residency status for people who've lived in a treaty country? I haven't submitted a NR74 (which I was advised NOT to do as it would essentially just flag me up as someone for the CRA to keep an eye on) so I'm essentially operating on my accoutant's (and your) assurances that they won't question my status.

[nelsona]

NR73 is the form for those leaving canada. NR74 is for those coming into canada. Don't submit in any event unless asked by CRA.

You left in 2009, so you should have already filed your 2009 departure return. Worrying about anything else at this point is counterproductive.