For people moving to Grenada from the United Kingdom or Canada, the biggest tax decisions are made in the country they are leaving. Grenada's rules determine what you pay once you arrive, but your former home decides when it lets you go, what it charges on the way out and what it continues to tax afterwards. Getting the exit wrong can leave you resident in two places, with no treaty to sort out the overlap.
This checklist sets out the main points for each country. Both systems are detailed and change regularly; the UK in particular overhauled its treatment of foreign income from April 2025. Use this as a map for a conversation with a licensed adviser in the country you are leaving, ideally months before the move.
The UK: the statutory residence test
UK residence is decided by the statutory residence test, applied to each tax year from 6 April to 5 April. It works in layers. First come the automatic overseas tests: broadly, you are non-resident if you spend fewer than 16 days in the UK in the tax year after having been resident in any of the previous three years, or fewer than 46 days if you were not resident in any of them. A separate test treats you as non-resident if you work full-time overseas and keep UK days and UK workdays below set limits.
If no automatic test settles it, the sufficient ties test combines your days in the UK with ties such as a UK home, family in the UK, substantial UK work, having spent more than 90 days in the UK in either of the previous two years, and, for leavers, whether you spent more time in the UK than in any other single country. The more ties you keep, the fewer days you can spend in the UK without remaining resident.
In the year of departure, split-year treatment can divide the tax year so that only the UK part is taxed as resident, but only if your circumstances fit one of the defined cases, such as starting full-time work abroad or leaving to live overseas and having no UK home.
UK points that continue after you leave
UK property income. Rent from a UK house remains taxable in the UK. Under the non-resident landlord scheme, letting agents or tenants deduct basic-rate tax unless HMRC approves gross payment. A return is still required.
UK pensions. Private and workplace pensions paid to non-residents may be taxed in the UK unless a treaty provides otherwise. The UK State Pension can be paid to Grenada, but whether annual increases apply abroad depends on the country; confirm with the Department for Work and Pensions.
Temporary non-residence. If you return to the UK within five years, certain gains and income received while abroad can be taxed on your return. A short spell in Grenada followed by a quick return can undo the planning.
Inheritance tax. From April 2025, UK inheritance tax exposure on worldwide assets turns on long-term residence rather than domicile. Someone who has lived in the UK for many years may remain within it for several years after leaving.
The new foreign income regime. The former remittance basis for non-domiciled residents was replaced from April 2025 by a time-limited regime for new arrivals. This matters mainly if you later return to the UK after a long absence.
Canada: residential ties and the departure tax
Canada has no day-count test for leaving. The Canada Revenue Agency looks at residential ties. Significant ties are a home in Canada, a spouse or common-law partner in Canada, and dependants in Canada; keeping any one of them makes it likely you remain resident. Secondary ties, such as a driver's licence, provincial health coverage, bank accounts, club memberships and vehicles, are weighed together. Form NR73 can be used to ask the CRA for an opinion on your status.
On the day you cease to be resident, Canada treats you as having sold most of your property at fair market value, the departure tax or deemed disposition. Gains on shares, funds and many other assets become taxable on your final return even though nothing was sold. Canadian real estate, registered plans such as RRSPs and TFSAs, and certain pensions are generally excluded from the deemed disposition, but they carry their own rules for non-residents. Security can be posted to defer payment in some cases.
After departure, Canadian-source payments to you, including RRSP withdrawals, pensions and dividends, are subject to non-resident withholding tax. Without a comprehensive treaty between Canada and Grenada, the domestic rate applies, so the timing and form of withdrawals deserve planning.
Canada points that continue after you leave
Several Canadian matters remain live once you are resident in Grenada.
- Canadian rental property: rent is subject to non-resident withholding on the gross amount unless you file an undertaking to report net income, and selling requires a clearance certificate process.
- CPP and OAS: Canada Pension Plan benefits can be paid abroad; Old Age Security can be paid abroad only if you meet residence requirements, generally 20 years in Canada after age 18. Both are subject to non-resident withholding.
- TFSAs: you can keep a TFSA, but contributions made while non-resident attract a penalty, and the account may not be tax-free in Grenada.
- Provincial health coverage: it ends after a period outside the province, which differs by province, so arrange health insurance in Grenada before it lapses.
- Returning later: coming back to Canada resets the cost of most assets to their value on re-entry, but leaving and returning repeatedly brings scrutiny.
A combined exit checklist
Whichever country you are leaving, these steps reduce the risk of remaining resident or paying tax twice.
- Decide your departure date and work backwards: book advice at least three to six months before it.
- Decide what happens to your home. Selling or letting on a long lease is clearer evidence of departure than keeping it empty and available.
- Review investments for gains that crystallise on departure, especially in Canada, and for UK temporary non-residence exposure.
- Plan pension withdrawals and lump sums, including which side of the move they should fall.
- Notify your tax authority of departure through the proper form or final return, and keep the confirmation.
- Close or update accounts, memberships and registrations that act as ties, and keep proof of each step.
- Register with the Inland Revenue Division in Grenada for a TIN once you are likely to be resident, and ask a Grenadian accountant how your incoming income will be treated.
Common exit mistakes
Keeping the family home "for visits". A home available to you is a powerful UK tie and a significant Canadian tie. It is the single most common reason people remain resident after moving.
Telling no one you have left. Without a final return or departure notice, a tax authority keeps expecting returns and may issue estimated assessments. Close the loop formally and keep proof that you did.
Counting days without counting ties. Under the UK test, days and ties work together. Under the Canadian approach, ties are almost everything. Neither system is satisfied simply by spending most of the year in Grenada.
Letting provincial or NHS cover lapse unplanned. Health coverage tied to residence ends after you leave. Arrange insurance that works in Grenada before your last day, and check whether it covers evacuation to a larger regional or North American hospital.
Leaving accounts dormant at home. Some UK and Canadian banks restrict accounts for non-residents. Tell each institution about the move, update your tax residence on file, and keep at least one account usable for pension income.
Assuming the year-end is the same. The UK year runs April to April, Canada's and Grenada's run January to December. A move in October falls in different positions in each year, which affects split-year claims and first-year Grenadian residence.
Frequently asked questions
How many days can you spend in the UK after moving to Grenada?
It depends on your ties. Under the statutory residence test, a former resident is automatically non-resident below 16 UK days a year; above that, the permitted days fall as UK ties increase. Confirm your position with a UK tax adviser.
What is Canada's departure tax?
When you stop being a Canadian resident, most of your property is treated as sold at fair market value, and the gain is taxed on your final return. Canadian real estate, RRSPs and some pensions are generally excluded but have their own non-resident rules.
Can the UK State Pension be paid in Grenada?
The UK State Pension can be paid to people living abroad, including in Grenada. Whether annual increases are applied depends on the country of residence and any social security agreement, so confirm the current position with the Department for Work and Pensions.
Does Old Age Security stop if a Canadian moves to Grenada?
Old Age Security can be paid abroad only if you lived in Canada for at least 20 years after age 18, broadly speaking. Otherwise payments stop after a period outside Canada. CPP is not subject to this rule. Check with Service Canada.
Is there a tax treaty between Grenada and the UK or Canada?
Grenada has no comprehensive modern treaty with Canada, and its arrangement with the UK dates from the colonial era. Many cross-border issues are therefore resolved by domestic rules in each country, so specialist advice is important.
