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tax“Taxation is legalised extortion and is valid only to the extent of the law.”

Ed Troup (now Head of HMRC – in a 1999 newspaper article)

This final installment in a trilogy of posts detailing the transition of my tax affairs from the UK to Canada over the last year (previous episodes here and here) may seem somewhat dry reading, but it might also provide at least some useful information for those who find themselves in the same boat.

As mentioned previously I had taken advice from HMRC in the UK before we left for Victoria. One of the suggestions that they had made was that I should write to them setting out in detail our intentions and proposed schedule. This I did – if for no other reason than that it is always a good idea to get such things down in writing and to file a copy for posterity.

Income tax in the UK is collected through a Pay As You Earn (PAYE) system which relies on each individual being ascribed one or more codes which determine how much tax is deducted each time an income is payed. My income before retirement fell into a higher tax bracket, which in turn meant that the two pensions that I was already drawing at the start of the 2015/16 tax year were also taxed at that level. When I retired and started receiving my third and final pension (but stopped receiving a salary) the tax codes for all three pensions should have been changed to reflect the fact that my income no longer merited being taxed at the higher level. Once we had become Canadian tax residents the codes should have been changed again to ensure that I was no longer taxed in the UK at all.

Naturally, ensuring that these codes were all corrected at the appropriate times proved to be far from simple. They should have been updated as a result of communications from my final employer when I retired, but in the event I still had to spend some considerable time on the phone from Canada to the HMRC arguing the case before all three pensions were finally being taxed at the basic rate. HMRC then had to pay me a rebate for overpaid taxes – which they duly did.

Once my tax status as a resident of Canada had been confirmed by Revenue Canada and the consequent paperwork forwarded to HMRC there followed another round of ‘negotiations’ before all three pensions finally became un-taxed in the UK. I had by this point already been taxed in Canada for the year to December 31st and I was looking forward to recovering the monies that had been deducted in the UK since our departure in July. A further conversation with HMRC made it clear that this wouldn’t happen until I had completed and submitted a tax return for the 2015/16 tax year in the UK.

Filling out that tax return was quite a mission in itself and entailed another couple of hours of phone calls to HMRC before I was satisfied that I had accurately particularised our situation.

Having ventured thus far with my explication I firmly intend to document that process as well – though I fear that so to do will entail a fourth post. Ah well!

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pieter_brueghel_the_younger_paying_the_tax“The hardest thing to understand in the world is the income tax.” 
Albert Einstein

I have been meaning for some little while now to draft a brief disquisition on the subject of taxes – with particular reference to the effects thereon of relocating to a different continent. Though circumstances are – in term of taxation – really quite different from case to case, it is yet possible that my recent experiences in the field may be of some small use to someone somewhere.

That I have not until now carried out the electronic equivalent of putting pen to paper can be readily explained. Our situation featured certain complexities which have complicated the transition considerably. It is only very recently that we can state with reasonable confidence that our tax affairs have now been put in order. We have yet to receive final written confirmation that this is the case, but the omens have a propitious look about them.

It is a basic principle of income taxation that the norm is for all such to paid in one’s country of residence. There might well be exceptions should one be in receipt of income from territories other than that in which one resides, unless there exist between said nations a reciprocal tax agreement. The United Kingdom and Canada have just such an agreement.

On moving from the UK to Canada there is a supposedly relatively simple procedure to follow to ensure that one stops paying tax in the former and commences so doing in the latter. Of course, such things rarely turn out to be simple in practice, though that has much to do with the degree of tax complexity to which one is subject.

In my case the situation was complicated by the following factors:

  • I retired part way through the 2015/2016 tax year. I paid income tax at above the basic rate on my salary until that point.
  • I was already drawing two of my three employer’s pensions from the start of the year. These were also being taxed at the higher rate.
  • When I retired my final pension kicked in, though of course my salary stopped at the same time. I was still being taxed at the higher rate even though my income no longer merited such.
  • Two weeks after retiring we moved to Canada and I became a tax resident here. My pension incomes are all paid in the UK and transferred monthly to Canada, but because the UK uses PAYE (Pay as you earn) I was still seeing tax deducted at source in the UK. I was thus for a period being effectively taxed in both countries – though in Canada (which does not have PAYE) payment was not due until the end of the tax year.
  • We sold our property in the UK a week before leaving the country. Normally the sale of one’s primary residence in the UK does not attract capital gains tax. We had – however – been living in a rented apartment for our last four years in England, and had tenants in our apartment. In such circumstances the rules are different and capital gains tax can come into play.
  • The UK and Canadian tax years do not coincide. In Canada the tax year runs quite logically from January 1st to December 31st. In the UK – as you might expect – the situation is quite different and the year runs from April 6th to the subsequent April 5th.

I fear that I can only subject myself to a certain level of tax contemplation at any one sitting. A subsequent post (or posts!) will thus be necessary to guide the gentle reader through how the process of tax transfer was effected in our case.

Something to look forward to!

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Photo by Andy Dawson ReidI have to admit that – in spite of my advancing years and general all-round good fortune when it comes to opportunities for adventure and experience – I am still a neophyte in many regards. There are skills and proficiencies that I have yet to attempt, let alone to master, but at which others seem to have been practicing since they were able to walk.

Some such – hunting, fishing, flying, parachute jumping, skiing and so forth – I am not even sure that I much care about, although I am aware that they arouse in others a mighty passion. Other competences I have attempted in my later years, mindful that a chap probably really ought so to have done. Riding was one such. I didn’t stick at it for long – sad to say – discovering that (although like everyone else I must surely have already known) the pursuit is massively expensive and also that (and this was news to me) all horses are actually a fair bit madder than their owners.

The subject of this post is – however – none of the above. I was – until a couple of days ago – a tow virgin!

I know – I know!

Though I was for several decades the proud possessor of a 12 seat V8 Land Rover County Station Wagon (named Katy after the 4×4 army ambulance that John Mills cajoles across the desert in ‘Ice Cold in Alex’) which I even took off-road on occasion, I never did get around to towing anything with it.

My only real experience in this regard was assisting our dear friends here in Saanichton a few years back in taking their boat to the launch. I had to drive the empty trailer back to their farm on my own, the which I duly did with a certain degree of trepidation. I must admit that after a few abortive attempts at backing the trailer into its parking space I gave up, uncoupled it and pushed it in by hand. Not feasible when fully loaded of course.

Since I firmly intend to own a boat here on the island and will definitely need to trailer it, I already had on my agenda for the coming months some time spent in a quiet spot practicing. This gentle approach was blown out of the water in snowy Kamloops earlier this week when it became apparent that we would need to convey quite a large number of boxes back to Victoria. The only feasible method of so-doing was to hire a U-Haul trailer, to tow it over the icy mountains to the coast, to take the ferry across to the island and – having unloaded – deposit the beast at the Victoria U-Haul depot.

To say that the prospect aroused in me some apprehension would be to put it mildly. I had no real experience to call upon and – though the Lexus is supposedly well up to this sort of task – I had no way of knowing if it were fully equipped so to do.

In the event – and with some extremely cautious driving on my part, particularly when it started to snow – we made it back in one piece. We took the Fraser Canyon in preference to the Coqhuihalla – the former being nowhere near as high a pass, with Jackass Mountain being the only really tough stretch. The weather tends to be a little kinder as well on this route and the only downside is that it adds an hour to the journey. The Girl estimated that departure from Kamloops at 10:00am would see us reach the ferry at Tsawwassen at 4:00pm and she was bang on the money!

The hardest part of the whole proceeding was back in North Saanich. It was dark by the time we got home and raining heavily. I had to back the trailer off the road and into our steep and fairly narrow drive. It took two attempts and I nearly put the Lexus into a ditch in the process. Fortunately the natives are friendly in these parts and the few passing motorists forced to delay their journeys indulged my amateurish attempts with patience and the minimum of heckling.

Considerable amounts of practice will be required before I attempt that with a boat!

What I did learn is that the Lexus is a magnificent vehicle for this sort of thing. It scarcely turned a hair at having to lug a heavy trailer over the mountains in snow and ice and at no point gave us the slightest cause for concern. I am also extremely glad that we spent a packet fitting new winter tyres before we headed inland three weeks ago, a feeling amplified each time we saw some hapless soul in the ditch on the more treacherous stretches of the road.

The Lexus is clearly currently far better equipped than am I. Back to school for me!

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Photo by Andy Dawson Reidyear-end also year·end (yîr′ĕnd′)
n.
The end of a year: the value of the account at year-end.
adj.
Occurring or done at the end of the year: a year-end audit.

It is at this time of the year that the Girl and I habitually sit down and look back over the events that have unfolded throughout the preceeding twelve months. It is always good to take stock of what has (or has not) been accomplished and to use this as spur to encourage us onward toward the nascent season ahead.

It need hardly be said that the year just ending has been – to put it mildly – epic! We have retired from the world of work. We have sold up and closed down our existence in the United Kingdom. I have become a Permanent Resident of Canada. We have moved across an ocean and a continent. We have purchased a house. We have instigated the lengthy and complex process of setting up a new life here on the west coast of British Columbia.

Given that all of this is the culmination of a five year project it would not be at all surprising were we to be somewhat overwhelmed by the massive changes that our little lives have undergone. In the event the happenings of the last couple of months have added a momentum of their own which has imbued the end of the year with yet another unexpected twist.

I have already alluded in cryptic manner to an issue that has arisen concerning our house purchase that has required the intervention of the legal profession. As the matter is ongoing I cannot at this stage tell all. Suffice to say that there is an issue with the property that was not disclosed at the time of the sale – though it was known about. Given that considerable expense will now be required to resolve the matter, we are seeking – and are most hopeful of achieving – a suitable settlement with the vendors.

Then – a week before Christmas – we suffered a bereavement. When the Girl’s mother died when she was in her early teens, her mother’s best friend – an honorary aunt – stepped in and effectively raised her from that point on. Such was the robust nature of this exceptional lady that – though well into her eighties – we believed that she might live forever. She was always exceedingly kind and generous to us and we will both miss her terribly. For the Girl this is, naturally, a particularly difficult time.

The Girl was grateful that – by catching the 5:30am flight out of Victoria the Sunday before Christmas – she was able to reach the hospital in Kamloops (her birthplace) in time to say goodbye. She returned to Victoria on the afternoon of Christmas Eve, we entertained on Christmas Day and – early the next morning – took the ferry to the mainland and drove back into the snowy interior of BC for the memorial service. The Girl is joint executor to the estate and we will have to stay in Kamloops for a while helping to sort everything out.

All in all, not how we expected this momentous year to end. Regardless we wish all gentle readers a very Happy New Year, and a prosperous – not to mention hopefully calm – 2016.

 

 

 

 

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imageThus commence all good fairy stories.

This one is no exception…

I feel sure that the habitual reader – should such there be – will be unsurprised that there has been something of an hiatus since my last posting to this journal. Given that this week has proved to have been – as predicted afore-hand – pretty ‘full on’ (as the parlance has doubtless not had it for years!) it will probably be taken as read that there has been little time or energy left over to practice the communicative arts.

No matter! We are in!

By which I mean – of course – that as of last night we are officially in residence in our splendid new (to us!) domicile.

As for our physical and mental state you would have more sympathy – I have no doubt – were our weariness solely attributable to our endeavours on the home-making front. Alas, I cannot pretend that this is so. For the last few nights at least we have been living the high life.

Should I needs plead an excuse I find myself in possession of one such of the copper-bottomed variety. This past week has seen the occasion of the Kickass Canada Girl’s birthday.

Happy birthday to the Girl! Hooray!!

Celebrations have included participation in several events of a charitable nature, which means that not only have we indulged in revelry but that we have done so in good cause!

We commenced on Thursday night at a fundraising dinner in support of the Tour de Roc – the ‘Cops for Cancer’ charity cycle which takes two weeks to ride the length of Vancouver Island. This splendid campaign has been an annual event since 1998 and the officers who volunteer not only ride over a 1000 kilometres but also have to scrub up and put in appearances at fundraisers throughout the fortnight.

Last Thursday was the penultimate day of the ride and the dinner in the evening – at the Mary Winspear Centre in Sidney – not only offered quite the best mass-catered buffet I have encountered, but also a full bill of comedy headlined by our new Canadian favourite – Mike Delamont, who once again had us crying with laughter.

Friday found us back at the Mary Winspear Centre for another charity event for which the Girl’s best friend was helping to organize the silent auction. The most worthy cause on this occasion was the raising of funds to support the excellent work done by ‘THRIVE Malawi‘.

The centrepiece of the event was a concert by local ensemble – The HiFi. All you need to know about this assemblage of musos – who describe their schtick as “New Orleans, West Coast brouhaha” – is that not only are all concerned amazingly talented musicians, but one of them is actually an internationally reknowned boogie pianist appearing under a pseudonym for contractual reasons. Anyway, they all appeared to be having a lot of fun – as were we!

 

With regard to our new home… all of our goods and chattels were duly cleared through Canada Customs on Wednesday morning, and the movers spent the rest of the day unloading and unpacking everything. They were contractually obliged to unpack everything to a ‘flat surface’ and we to let them so do – for were there to be any breakages of items not so processed we would not be able to claim for them.

As a result the day was extremely long and tiring and at the end of it every available surface was covered with gewgaws. It took a couple of days subsequently to create sufficient order that we could actually take up residence. This not helped of course by the fact that once one’s possessions have been bundled up and bumped halfway around the world in a container absolutely everything needs to be washed before it can again be used.

No matter. ‘Tis done and we are in!

Guess I am now officially a resident…

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Image from Pixabay“A transition period is a period between two transition periods.”

George Stigler

The period following the declaration in September 1939 that a state of war existed between the United Kingdom and Germany – the which endured until April of the following year – came to be know as the ‘Phoney War’. This because, following the Nazis’ blitzkrieg attack on Poland and Chamberlain’s dramatic declaration, as far as the general public could tell – absolutely nothing happened!

That this was – of course – far from being the case became all too apparent as the following year unfolded, but the phrase – and the notion – has stuck. It now provides a useful analog for an unexpected hiatus.

Far be it from me to suggest that the events of the past two months in our humble lives could in any way compare with such great moments from history – but I am, naturally, about to do just that.

Since the offer on our new home on the Saanich peninsular was accepted and the contracts signed back at the start of August we have existed in a dreamlike state of limbo. Schemes have been schemed – researches pursued relentlessly – plans prepared patiently… inspiration quivering tremulously just beyond reach like some slippery Will O’ the Wisp…

Not a great deal of any true import has been achieved. We have instead floated through a delightful holiday-like existence at our lovely friends’ smallholding in Saanichton, indulging in all the delights that Victoria has to offer of a summer season.

All this is about to change…

Next week we take over and move into our new home and all of our worldly possessions finally finish their long voyage from the UK.

I have already made reference to some of the many differences between buying and selling property in Canada and so doing in England. A further disparity – particularly if one is in the fortunate position of not requiring mortgage finance – is that the legal profession’s part in the process over here amounts to little more than a cameo.

As soon as we had received an offer on our apartment in Buckinghamshire I had immediately to engage a solicitor, by whom the process was effectively run from that point on – all the way to completion. Here in Canada we were advised that a lawyer would not be required until the very last moment. Sure enough we finally met our lawyer earlier this week, signed the necessary papers and handed over a bank draft made out for a very large sum of money. Apparently we will not need to see him again.

The funds will be transferred to the vendor on Monday next, we take possession at midday on the Tuesday and our goods and chattels should be with us on Wednesday.

There is some uncertainty as to the exact timing of this final phase because our various bits and pieces – having been extracted from their container upon arrival in Vancouver a couple of weeks ago and subsequently stored in a bonded warehouse there – still need to be cleared by Canada Customs. We will meet the truck bringing them from Vancouver at Victoria International Airport (where Canada Customs have an office) and the business will be transacted there. We don’t envisage there being any problems, but don’t yet know if this will take place on Tuesday afternoon or Wednesday morning.

Once everything has been unloaded and unpacked – that’s when the fun really starts…

Until then – and as a way of preparing ourselves for the busy and arduous week ahead – we have run away for a couple of nights to Saltspring Island, concerning which more anon…

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Image from pixabayIn exactly four weeks from today we will take possession of our new home on the Saanich peninsular north of Victoria.

If we are fortunate – and our experiences of late seem to suggest that frequently we are so – then our goods and chattels – which have been bobbing their merry way across two oceans – should put in an appearance at roughly the same time.

We have, in fact, heard from our tranter – Bournes International Moves – that the vessel that is playing host to our container is due to make landfall in Vancouver on or around September 4th or 5th. Whereas that should leave plenty of time for our precious cargo to reach us before we complete the house purchase it must first clear Canadian customs – a process in which we need apparently have some personal involvement, the details of which we will learn more about in due course.

Should this cause only a minor delay then our goods must needs briefly be held in storage in Vancouver before making the final leg of the journey to Victoria. This has already been factored in and the necessary arrangements made to cover all eventualities.

I have previously made reference to the fact that our new home – though really in very good condition – is in need of some updating, mostly to bring it into the current century in terms of style and convenience.

Our current wish list of improvements includes the following – in no particular order:

  • A new kitchen
  • Complete renovation of the family bathroom (mine!)
  • Extension and renovation of the ensuite bathroom (the Girl’s)
  • Connection to the natural gas main (we want a gas range and gas water heating)
  • A modern gas fireplace for the living room
  • Hardwood flooring in the living room and bedroom (the Girl does not tolerate carpets well)
  • Installation of a new staircase to give better access from the living rooms to the garden. (This will also involve opening up one of the current external walls at the foot of the new staircase and the installation of new patio doors to the ground floor in its place)
  • In conjunction with the above – the re-siting and re-commissioning of the hot tub (come on – this is Canada!)
  • The creation from the downstairs family room, kitchen and bedroom of a new studio apartment for our guests to use (and for possible future Air-B & B-ing)

I feel sure that there will also be many other things to do, but that’s about all I can think of at the moment. Besides – that’s quite enough to be getting on with.

Though we are blessed with wonderful friends in Saanichton who put up without complaint with our squatting in their suite and imposing on their hospitality, we are reaching the limit of our patience with living out of suitcases. The next four weeks of limbo-living will probably fly by, but we are now increasingly impatient for them so to do.

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 Image from Pixabay“It’ll be just like starting over – starting over”

John Lennon

Wow!

This has been quite a week. Having stripped our lives right back to the bone in the UK before we departed those shores we are now frantically putting them together again here in Victoria. I don’t know when the relaxation part of retirement is going to kick in, but it sure as heck ain’t gonna be just yet.

The days have thus far been just too busy for me to be able to find the time to post, but this end of (working!) week catch-up will hopefully hold back the rising tide of impatience amongst those readers who want to know just what the devil is going on with the immigrants and homecoming queens here on the Pacific northwest coast.

Well – this is what the Kickass Canada Girl and I have done this week.

We have:

  • visited the Victoria Canada Service Centre to acquire for me a Social Insurance Number (SIN). This is necessary should one wish to work in BC or to be able to access other government services.
  • been to the Insurance Corporation of British Columbia (ICBC) office to trade our UK driving licences for temporary BC equivalents.
  • paid a visit to the bank to set up a chequing account for me and to apply for credit cards.
  • commenced our search for somewhere to live (or rather, moved our previous online search onto the real streets of Saanich).
  • sent off registration details and applications for Health Insurance Cards (BC Services Cards). Though these will not come into effect for three months (meaning that we had to take out three months travel health cover before setting out) when the cards arrive they can be used as proof of identity to turn our new temporary driving licences into permanent versions.
  • completed and posted the application for my UK pension incomes to be taxed in Canada.
  • had a meeting with a mortgage broker to get some advice regarding the existing mortgage on the Girl’s son’s condo (apartment).
  • been to view – and shortly thereafter to purchase – a convertible for the Girl, to replace the much loved vehicle that had to be traded away just before we left the UK.
  • been to view a suitable 4×4 for me. The vehicle concerned had not at that point been staged, so a return trip is on the cards tomorrow.
  • viewed yet more houses – including paying a second visit to one that we liked a great deal and on which we subsequently made an offer! At this point we discovered that the real estate market in Canada is just as non-functional as that in the UK, though in different ways. At the point of writing it doesn’t look as though we will actually get this house, but this would appear to be because the vendors – although they have gone to the trouble of listing it – do not actually seem to want to sell it!

Well – I think all might agree that this represents rather a good week’s work. We – at any rate – are quite worn out, though at the same time really somewhat impressed with the progress that has been made.

Phew!

And so to bed…

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image…no, no – that’s just a little too obvious!

Let’s just say that the Immigrant is Imperceptible no longer (though I like the tag so much that I most certainly intend continuing my use of it).

When I last posted concerning my attempt to become a Permanent Resident of Canada I described to process to the point – which had then just been reached – at which my Confirmation of Permanent Residence (COPR) had arrived in the post. All that remained – I wrote – was for me to ‘land’ in Canada.

The process is this:

The COPR document is essentially a temporary visa with an expiry date by which point the applicant must have ‘landed’ in Canada. Upon ‘landing’ the temporary visa is replaced by more permanent documentation and the applicant becomes a resident of Canada. This is done at the ‘port of entry’ into Canada.

Thus, when I landed on Sunday morning at Vancouver International I was directed to the Immigration hall, triaged by a very polite young man and then passed over to the Canada Border Services Agency (CBSA) for a brief interview and document processing.

Having heard that this might be a lengthy process we had arranged an hiatus in our journey at this point of some three hours before catching the connecting flight on to Victoria. Of course, when we entered the Immigration hall it was almost entirely empty, save for the helpful young man, a suitably stern CBSA lady and our good selves. As a result the whole operation was completed in around thirty minutes and we found ourselves with a considerable amount of time to kill before we could take the last step of our long trek.

For the record, the CBSA lady did not issue any new documentation – she merely stamped the existing COPR document. The final PR card will apparently catch up with me later. The stern lady also assisted us with our customs declaration which she need not have done, though as the centre was so quiet she seemed happy to do the leg work for us. She filled out Form B4 – ‘Personal Effects Accounting Document‘ (eschewing the copy that I had prepared earlier) – and stamped the printed copies of the spreadsheet that I had provided listing the ‘Goods to Follow’ which comprise the contents of our shipping container.

Now, I have to say that – compared to the preceding elements of the process – ‘landing’ could not have been accomplished in a more easeful and efficient manner. My thanks to the Canada Border Services Agency for helping to make my arrival go as smoothly as it did.

And as just about everyone has extended to me thus far – “Welcome to Canada”.

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image(…with just a hint of an apology to a Warren Zevon!)

it matters little that the Girl and I have been planning our move to Canada for a half decade now. No amount of imagining or fore-thought could have prepared us for the sensation that we are now experiencing in this strangely suspended state on the eve of departure. It must – of course – be much the same for all who pursue a similar course of action, but that is of oddly little comfort.

To reach the point at which we could transfer our existence to the far side of the globe it has been necessary for us – slowly but surely – to dismantle our life in the UK. Thus it is that I find myself now – for the first time since I achieved majority – devoid of paid employ, no longer the owner of land or property, without a motor vehicle or a mobile phone to my name and living out of a suitcase.

I feel strangely rootless and – dare I say it – practically stateless. Actually I dare not – of course – since that really would be a travesty in the light of the unfortunate thousands that truly are so.

Which having been said…

I have long carried with me at all times that which those of a sensitive disposition might refer to as a Mens’ Personal Organiser – but which the more brutal still stigmatise as a Manbag. This most useful carryall incorporates a large pocket at the front in which I habitually keep my keys… office keys, School master keys, house keys, car keys…

For the first time since I started carrying said tote in my early twenties, the key compartment is empty…

…which is a very odd feeling…

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