candian tax

oops_a_daisy

Right this could be a long one so please bear with me - there is a tax related question at the end !

My Nana was visiting a relative in Canada 1 1/2 years ago and was in a car accident which nearly killed her, killed 2 of her sisters and 1 niece. To cut a veeerrrryy long story short she was in hospital in Canada, air lifted back to the UK, then in hospital for over 6 months here before being discharged. Her injuries were pretty bad ( considering she is 86 she was very luck to survive ) she had a broken neck, arms, ribs, fingers, swelling to the brain... the list goes on. She lives on her own in a housing association flat very close to where my parents live. My Nana now needs care around the clock and will probably end up in a home. She has a carer 3 times a day and one of the family also visit once a day too.
The insurance company are making regular payments to cover her care needs and to cover the families expenses - they are soon to make a full and final settlement in respect of her care needs based on her life expectancy ( this is seperate to compensation due to Canadian law ).
The actual compensation for the accident has just come through for various members of the family including my Nana BUT it has been taxed in Canada which has reduced the amount hugely and the cheques that arrived were in canadian dollars which also meant a huge chunk was taken by her bank.
I am trying to find out if she ( or any other member of the family who received compensation ) has to pay these Canadian taxes ? We have had to have a lawyer in Canada deal with this as no Lawyer in this country would even look at it because of their laws. Its a long shot I know but does anybody know if she/we are liable for Canadian taxes ?

Thanks for reading and I hope somebody can offer advice or point us in the right direction to get advice.

tumbleweed261

When I lived there I was eligible to reclaim my state sales tax upon leaving because I was only a temporary resident of Ontario (5.5 months - if it had been 6 months I wouldn't have been eligible) - I don't know if this applies to any other taxes though. When I submitted the claim they were very good and sent the refund quickly in pounds though, so maybe worth a shot? Good luck, and I hope your family are well again soon.

oops_a_daisy

thanks tumbleweed - following your reply I definately think we need to look into this a bit further. I think we need to go back to the lawyer and start asking some more questions. Im also not sure but was also wondering if we can contact the British Consulate over there

tumbleweed261

This is the website for the Canada Revenue Agency, don't know if it will hold the answer, but it might be worth a look before you incur any further legal fees? Good luck!

edit: refund forms are here

Cook_County

It would need some research but I expect that the payments are almost certainly treaty exempt from Canadian tax so a treaty-based tax return would be required in Canada. (The payments should only be taxed in the UK under the treaty because the receipient is treaty resident in the UK).

Challenge the lawyers on this to see if they have reviewed the Canada/UK tax treaty.