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Posted Wed, 16 Feb 2022 22:03:13 GMT by jpichette
Hello, I am trying to determine how taxation occurs for capital gains in a in-trust account for a Canadian born beneficiary who is now a UK resident. My understanding is that if a capital gain is realized in the account but no funds/income is sent, the capital gain is taxable to the beneficiary in the UK on their tax return. Would there be tax payable in Canada as well? and if so, is this a scenario where a tax credit would offset the tax charged by the Canadian Government? Thank you for any clarification on this.
Posted Thu, 17 Feb 2022 09:00:16 GMT by Andrew Williams
Hi,

Any capital gains arising abroad, would still be reportable to the UK as a UK resident unless the tax treaty states otherwise.

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND AND THE GOVERNMENT OF CANADA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND CAPITAL GAINS

As the gain arose abroad, the other country may also tax this too but you can then consider claiming foreign tax credit relief for tax already paid.

Foreign tax credit relief and capital gains (Self Assessment helpsheet HS261)

Thank you.

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