Working holiday abroad and income/savings

FussyPants01

Any advice, please? My daughter (aged 20) is in her final year of uni. Her income last tax year was £750ish...so well below tax threshold. Next summer 2026 she hopes to do a working holiday in Canada. What are the income tax implications/what does she need to do AND she has about £21,000 in an ISA saved by yours truly. Better rates are available in NON ISA but obviously, it will then lose the tax benefits and cannot all be re-invested. She doesn't need access to the money for 1 year plus at least. Thank you!

Mark_d

The employer in Canada will take care of tax on your daughter's Canadian earning.

Bit of a waste giving so much money to your daughter.  She doesn't need it but it could make a huge difference to some people.

wmb194

FussyPants01 said:

Any advice, please? My daughter (aged 20) is in her final year of uni. Her income last tax year was £750ish...so well below tax threshold. Next summer 2026 she hopes to do a working holiday in Canada. What are the income tax implications/what does she need to do AND she has about £21,000 in an ISA saved by yours truly. Better rates are available in NON ISA but obviously, it will then lose the tax benefits and cannot all be re-invested. She doesn't need access to the money for 1 year plus at least. Thank you!

£21k is only slightly above the annual Isa allowance for adults so it shouldn't be a big deal if it was in a better paying taxable account for a while as a non-taxpayer and it shouldn't be a problem to replace in the future.

Newly_retired

Your daughter can have at least £1000 on interest free of tax if she wants to move money elsewhere. Depending on her earnings, she might have a higher tax free savings allowance, so an ISA may not be crucial.

Brie

I don't know precisely how it would work for someone like your daughter but it may be that if she doesn't work a lot in Canada she may not exceed the limit for no income tax.  But the employer should deduct the tax from each pay and submit it to Canada Revenue.  When she leaves each and every employment she should be given what I recall is a T4 form (like a P45 in the UK) and after the end of the calendar year (not the UK tax year) she can submit an income tax form and potentially get a refund of the tax paid.  At least that's how it worked when I last lived over there a few decades back.  The tax return has to be submitted by the end of April for the previous calendar year.

If she/you need more informal tax info for Canada try asking on Facebook by looking for the "Canadian and UK Taxation" group.  

FussyPants01

wmb194 said:

FussyPants01 said:

Any advice, please? My daughter (aged 20) is in her final year of uni. Her income last tax year was £750ish...so well below tax threshold. Next summer 2026 she hopes to do a working holiday in Canada. What are the income tax implications/what does she need to do AND she has about £21,000 in an ISA saved by yours truly. Better rates are available in NON ISA but obviously, it will then lose the tax benefits and cannot all be re-invested. She doesn't need access to the money for 1 year plus at least. Thank you!

£21k is only slightly above the annual Isa allowance for adults so it shouldn't be a big deal if it was in a better paying taxable account for a while as a non-taxpayer and it shouldn't be a problem to replace in the future.

Good point! Thanks.

FussyPants01

Newly_retired said:

Your daughter can have at least £1000 on interest free of tax if she wants to move money elsewhere. Depending on her earnings, she might have a higher tax free savings allowance, so an ISA may not be crucial.

True! Probably only 6 months working there, so even more relevant. Thanks.Brie said:

I don't know precisely how it would work for someone like your daughter but it may be that if she doesn't work a lot in Canada she may not exceed the limit for no income tax.  But the employer should deduct the tax from each pay and submit it to Canada Revenue.  When she leaves each and every employment she should be given what I recall is a T4 form (like a P45 in the UK) and after the end of the calendar year (not the UK tax year) she can submit an income tax form and potentially get a refund of the tax paid.  At least that's how it worked when I last lived over there a few decades back.  The tax return has to be submitted by the end of April for the previous calendar year.

If she/you need more informal tax info for Canada try asking on Facebook by looking for the "Canadian and UK Taxation" group.