stokesey

I agree, but as Aviator says it maybe worth checking.... last thing we want is CRA coming after a large whack of our pensions!

Let me know if you find anything out 👍🏼

Otto The Squid

It might be worth pointing out that a UK IFA has to authorise the transfer and then sign an appropriate advice letter to the trustees. If the IFA refuses, and many do if this is not in your best interests, then it may not be as straightforward as you think.

I note earlier comments about a bond and 10 year lock in. Insurance bonds with hefty upfront commissions have no place in pensions, whatever the salesperson may say.

BexB

Hi, I transferred my UK final salary pension into a UK SIPP a few years ago, after I moved to Canada. The provider was prepared to accept it since, although I was living in Canada, it all derived from UK employment. There was the usual anti-money laundering paperwork etc. to complete.

I made a withdrawal of some of the SIPP fund last year, when I turned 55. From a tax point of view:
* Beforehand, I got the CRA to sign off a Double Taxation treat form, saying I was a Canadian resident for tax purpose. My aim was to receive the pension gross and only have to deal with the Canadian tax. UK HMRC did not accept this, due to the nature of the pension (effectively variable lump sums rather than a steady stream).
* The SIPP provider therefore deducted tax. They deducted a lot more than I was expecting, due to their using an emergency code. I got HMRC to send them a regular code (at the moment, you can receive up to GBP10,500 before paying tax, while 25% of the lump sum should be tax free) and I got a rebate. You may want to ensure the provider has a code first.
* The income is fully taxable in Canada, but you can offset the UK tax payable.

stokesey

Thanks for the reply, that's useful information.

This is one of my concerns in that both countries may want the taxes payable to them. Did HMRC pay you back without too much trouble?

Aviator

As a Canadian tax resident, your liability should be to Canada. If you pay tax in the UK, with the appropriate receipts of tax paid, you would only pay any difference that is owed to CRA.

stokesey

Hi - yes I understand that, and agree 100% my liability is to Canada (I just love the way Trudeau spends my tax $$ 😡), but in real world situation how easy is it to claim back from HMRC should double taxing occur?

Aviator

So long as you have a certificate of foreign tax paid it should be able to be claimed on a T1 return at the end of the year in Canada as a foreign tax credit. If you don't have an accountant, I would get in touch with one.

GC44

Have just done a web chat with someone at the UK pension advisory and he informs me that as I am a resident in Canada I cannot set up a new pension scheme (SIPP) to transfer my company pension too.
Is he right?

scottymallo

I am using London and colonial. They will do it for non residents. I have spent months of research and there is not a lot of choice I'm afraid.
I am not sure if this is the only option but I have struggled to get something set up without having to pay £xxxxs

stokesey

Jeez, why is nothing straightforward hey?

BexB

I found the concern wasn't the fact I resided in Canada, more the SIPP provider needing to make sure the funds all derived from when I worked and resided in the UK. Try A Bell You Invest, you could send them an email to explain your position.

GC44

Welcome to Canada, have a nice day!

dave2003

Since the changes in UK pension fund legislation there has been much discussion in the UK personal finance columns about the advisability of cashing in accrued pension funds-particular final salary or defined benefit funds. Many pension funds are trying to reduce future liabilities by offering attractive cash in values. Reference to actuarial tables showing total pension fund pay out if the fund is retained show the reason for the cash value pay out.


Many have cashed out, and regretted it.


Depending on your age, and any need for a big pot of cash now, tax implications, in Canada and the UK, and particularly where you might be living in the future are major considerations.


After living in Canada most of my life, I accrued a comfortable pension and investment income. I kept all those funds in Canada after talking to an independent actuary who advised that cashing out, for me, was not a good financial move. His words, simplified, were income is everything.

stokesey

Apologies Dave, just to clarify....

We wouldn't be cashing in for a lump sum payout, it'd be invested into another pension fund as we're only 45 (but plan to retire at 55).

We should (fingers crossed) never need to take out a big pot of cash as we have no real debt.

I'm really nervous about this, but to be offered 42x annual pension is probably too good an offer to pass up.

As they're linked to CPI they really haven't done much over the past handful of years and I'm sure we can get better growth investing elsewhere?

stokesey

Haha, you got that right!!