Financial Advice for Expats in Canada

Canada’s tax system determines the taxes you’ll be exposed to based on your residency status. Like most jurisdictions, tax residents are liable against their worldwide income and assets, whereas most non-residents pay Canadian tax only on domestic earnings. 

Our Canadian expat advisers can, of course, help you determine your tax residency position and plan accordingly, accounting for tax obligations that may include the following:

• Income Tax: In Canada, income is subject to progressive federal rates ranging from 14.5% to 33%, plus additional local rates that vary by province and can, for example, reach 25.75% in Quebec.
• Capital Gains: The first 50% of most taxable gains is exempt, with the balance typically taxed at your marginal income tax rate.
• Dividends and Interest: These taxes vary significantly between provinces and income types, with most interest earnings subject to your full marginal rate and dividends subject to tax credits depending on whether they are ‘eligible’ or ‘non-eligible’.
• Foreign Income Reporting: Canadian resident expats must comply with the mandatory T1135 filing rules, which apply to overseas assets valued at over CAD $100,000

Our specialist wealth management consultants will work through all of these and other applicable filing and reporting obligations, ensuring you take advantage of tax reliefs and allowances to optimise your tax efficiency as a UK national living in Canada.

Yes, if you are a tax resident or earn income in Canada, including passive income from property rentals or dividends, you will be required to file a Canadian tax return.

The rules differ depending on whether you are a tax resident or a non-tax resident, regardless of your residency position associated with your visa or permit:

• Tax residents: Must declare all of their global income and assets, and may need to file foreign asset disclosures
• Non-tax residents: Must declare and pay tax on Canadian-source income

Chase Buchanan’s Canadian team can support expats with all aspects of compliance, including managing dual filings in the UK and Canada, as needed, and helping you remain adherent with the Canada Revenue Agency (CRA) regulations.

Any decisions about transferring a UK pension fund should only be made after consulting a seasoned professional with in-depth knowledge of the options, risks and costs, including transfer taxation, to ensure you avoid inefficient transfers. 

If you’ve decided to transfer a pension fund and have sought the relevant advice in line with FCA requirements,  you will find that you cannot directly transfer most UK pensions into a Canadian Registered Retirement Savings Plan (RRSP). 

You may, though, have flexible alternatives available that suit your retirement plans, including Self-Invested Personal Pensions (SIPPs), which can be structured to enable you to access and manage your pensions tax efficiently. We can advise on:

• SIPP vs. ROPS: Recognised Overseas Pension Schemes (ROPS) are HMRC-approved pensions that accept cross-border transfers. SIPPs are often seen as a beneficial alternative, as a type of fund that offers flexible access with fewer cross-border tax complications.
• Tax Treaty Implications: Depending on whether you are a tax resident, the location of your pension assets and the province you live in, you may be eligible to claim against the UK-Canada tax treaty to offset dual tax obligations.
• Currency Planning: Managing exchange rates is important if you’re drawing a UK pension from Canada, and we can assist with conversion strategies to protect against unnecessarily high FX risks. 

Our Canadian-based financial advisers have years of expertise in bespoke pension planning that balances drawdown flexibility with tax efficiency and will always provide advice based on the options most applicable to your circumstances.

As in all countries outside Britain, Canada does not offer favourable tax treatment for these UK-specific products.  That means that your ISAs and bonds will become fully taxable if you become a Canadian tax resident.

Tax residents need to be conscious that:

• Interest and Gains: Are fully reportable and taxable in Canada
• Loss of UK Reliefs: You will lose tax-free benefits associated with an ISA on relocation and be unable to make further contributions
• Transition Advice: We can step in to help restructure or reinvest tax-inefficient savings assets  before or after your arrival in Canada

Working with a wealth management team is highly advisable when deciding how to manage your UK investment and savings products, and we will ensure you understand the best solutions and avoid unexpected liabilities.

Canada doesn’t impose a federal inheritance or estate tax, but that doesn’t mean estates can be distributed to beneficiaries tax-free. Careful planning is essential to minimise probate delays, manage taxes levied on deemed dispositions, and prevent cross-border issues.

• Deemed Disposition: The Canada Revenue Agency (CRA) calculates the value of all assets based on fair market value unless transferred to a spouse, with taxes arising on the transfer of estate holdings, including potential capital gains tax.
• Probate and Wills: Expats must understand provincial probate fees, which can range from zero to 1.5% on estates worth over $50,000 in Ontario, and $350 plus 1.4% on all amounts of $50,000 and above in British Columbia.
• Trusts and Dual Wills: Help expats create UK–Canada estate plans and manage potential exposure to UK IHT or duplicate tax charges.

We support expats in developing tailored estate plans that align with Canadian law while protecting UK-based assets and their right to leave assets to their beneficiaries as they wish.

There are several options, but the right visas, permits or relocation routes will depend on numerous factors, including your income, age and intentions:

• Express Entry Visas: Enable skilled workers to apply for initial visas and often onward residency.
• Start-Up Visas: Open to entrepreneurs and investors who intend to launch a business in Canada.
• Family Sponsorships: Retirees with relatives who are legal Canadian residents or citizens can be sponsored.

While there isn’t a specific ‘retirement visa’ in Canada, Chase Buchanan’s financial advisers can work closely with immigration experts to ensure you know the best options and which visa categories you will be eligible for.

Foreign nationals are normally allowed to purchase property in Canada. Still, they must be aware of the temporary restrictions that prohibit them from buying residential homes in most metropolitan areas, which are currently in place until January 2027.

Those who already own a home in Canada, or plan to buy a property in the future, should budget for the following property taxes:

• Land Transfer Tax: Works similarly to stamp duty in other countries, and varies by province, with the highest rates levied in Ontario, British Columbia, Quebec and Nova Scotia.
• Capital Gains: Profits made on the sale of non-principal residences will usually be taxed, although 50% of the gain is excluded from the calculation.
• Annual Property Taxes: Municipal property tax rates apply across all provinces

We can help structure your real estate acquisitions,  minimising holding and disposal taxes and incorporating overseas property assets into your tax planning.

Yes, you can own a property in Canada as a non-tax resident, provided the purchase has been made in a rural area or outside of the current foreign buyer ban, but you may be liable for:

• Non-Resident Withholding Tax: Most non-residents will be subject to a flat rate 25% tax on gross rental incomes earned.
• Capital Gains: Payable on the gains made from the sale of the property unless an exemption applies.

Our advisers will guide you through the implications of property ownership as a non-resident, including the tax declarations you’ll need to file, such as forms NR6 for non-residents earning rental incomes, and NR4 for declaring withholdings.

As in every country, there are countless potential investment platforms, products, and asset classes you may wish to consider, and balancing your portfolio is essential at any stage. We offer access to:

• Offshore Investment Accounts: Accounts that enable expats to own assets that are held in tax-neutral jurisdictions 
• International Guaranteed Investment Accounts (GIAs) and Bonds: Flexible, multi-currency assets that may be suited to portfolios that benefit from global asset exposure.
• Canadian Investment Platforms: Compliant domestic investment platforms open to residents who want to invest in domestic products and assets.

All of the investment strategies and recommendations we provide are designed to optimise tax efficiency while ensuring expats benefit from liquidity and performance, and incorporate succession planning into their decisions.

Typically, you’ll need to hold comprehensive private health insurance to be eligible to apply for a Canadian visa or permit. However, once you have become a long-term or permanent resident, you might become eligible for Canada’s public healthcare system, called Medicare. 

This scheme is managed differently across the provinces and is commonly supplemented by private cover; foreign nationals must meet specific residency conditions to qualify.

Note that the S1 healthcare card and the Global Health Insurance Card (GHIC) are not recognised in Canada, and we’ll ensure your financial plans account for your healthcare needs during your relocation and retirement in Canada.

This treaty is an agreement between the two countries that prevents double taxation on pensions, dividends, royalties, and other income, for example, if an expat lives in one country and has assets or income in the other. As a very brief idea of the inclusions, the treaty covers:

• Pensions: Retirement income is typically taxed only in your country of tax residence
• Dividends: Some dividends originating in the UK and subject to tax at source may attract a limited credit if taxes already paid exceed a maximum 15% threshold set by the double tax treaty. 
• Capital Gains: Normally, capital gains are paid in the place where you are a tax resident, although you may need to claim foreign tax credits in some circumstances. 

Our wealth management specialists will help to structure your income streams to utilise treaty reliefs and avoid overlapping tax obligations to simplify your reporting requirements.

If you become a Canadian tax resident, your worldwide income, including UK property earnings, will be taxable in Canada. That means:

• Rental Income: Becomes fully reportable via your Canadian tax return, with UK tax paid credited to offset the duplicate obligation.
• Capital Gains on Property Sales: Must be declared in both countries, with an automatic UK tax obligation that can be offset by making the appropriate tax treaty claim. 

We can handle double filings and recommend a range of repatriation, transfer or holding structures to minimise tax and currency risks, depending on your property portfolio, income and tax position.

International SIPPs are a variant of the SIPP pension structures we’ve mentioned previously, allowing Canadian residents to consolidate UK pensions and draw their retirement income flexibly while investing their pensions in various currencies. While not necessarily appropriate for every expat, the benefits include:.

• UK Regulation: SIPPs remain subject to FCA oversight, which can offer peace of mind.
• Currency Management: Foreign national residents can control FX risk by investing or drawing down in certain currencies.
• Inheritance Flexibility: Some SIPPs offer features that enable holders to nominate beneficiaries with tax-efficient transfer processes, though detailed knowledge of double tax treaties is essential.

Chase Buchanan’s private wealth managers can suggest SIPP providers and account structures, alongside drawdown options to suit your retirement and tax needs.