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Old Jun 23rd 2017, 10:39 pm   #46
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Default Re: Cashing in final salary pension.

So, this whole experience has been a disaster.

We're being told that if we move our UK DB pension schemes into a UK SIPP then we have to declare that on our Canadian taxes and could be in for a £300k + tax bill.

I just don't see how this can be correct advice as we can't access this money until we're 55 (another 10 years), I guess we'll have to speak to a Canadian tax person to get a definitive answer.

I'm kind of questioning what we've just paid £2k for in financial advice!!
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Old Jun 24th 2017, 1:06 am   #47
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Default Re: Cashing in final salary pension.

I hesitate to question an expert, but that cannot be right. If for no other reason than all you're doing is exchanging one type of UK pension for another. You are not transferring the funds into another country, nor receiving payments.
As far as I know, you can draw from your SIPP at any time after age 55 (any amount, now UK has full flexibility), you just need to declare the income on your Canadian tax return (and any tax deducted in the UK).
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Old Jun 24th 2017, 2:40 am   #48
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Default Re: Cashing in final salary pension.

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Originally Posted by BexB View Post
I hesitate to question an expert, but that cannot be right. If for no other reason than all you're doing is exchanging one type of UK pension for another. You are not transferring the funds into another country, nor receiving payments.
As far as I know, you can draw from your SIPP at any time after age 55 (any amount, now UK has full flexibility), you just need to declare the income on your Canadian tax return (and any tax deducted in the UK).
Exactly!
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Old Jun 24th 2017, 4:24 am   #49
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Default Re: Cashing in final salary pension.

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Originally Posted by BexB View Post
I hesitate to question an expert, but that cannot be right. If for no other reason than all you're doing is exchanging one type of UK pension for another. You are not transferring the funds into another country, nor receiving payments.
As far as I know, you can draw from your SIPP at any time after age 55 (any amount, now UK has full flexibility), you just need to declare the income on your Canadian tax return (and any tax deducted in the UK).
I understand your thinking but just because a transaction is tax-sheltered in the UK it does not mean it is in Canada. I am concerned that the CRA will view this as a withdrawal from a pension scheme, which is taxable, and a subsequent investment in an account that is not tax-sheltered according to Canadian tax rules.
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Old Jun 24th 2017, 8:19 pm   #50
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Default Re: Cashing in final salary pension.

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Originally Posted by JonboyE View Post
I understand your thinking but just because a transaction is tax-sheltered in the UK it does not mean it is in Canada. I am concerned that the CRA will view this as a withdrawal from a pension scheme, which is taxable, and a subsequent investment in an account that is not tax-sheltered according to Canadian tax rules.
Hi Jonathan - is it really a withdrawal though rather than a move from one scheme to another?

When all is said and done I can't actually withdraw anything or access any of these funds until I'm 55 at which time I'd pay Canadian tax. Surely if they taxed me on it now and then taxed me again when I begin to withdraw pension I'd be getting double taxed?

There must be a way to get a definative answer, I'm just not sure where I need to go?

I've sent you a PM.

Many thanks.
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Old Sep 17th 2017, 2:41 pm   #51
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Default Re: Cashing in final salary pension.

Hi Stokesey

Came in a bit late on this thread, but may I ask if you have sorted your issue out?
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Old Oct 27th 2017, 12:32 pm   #52
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Default Re: Cashing in final salary pension.

Hi
Just bumped to the top to see if any update
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Old Nov 13th 2017, 2:23 am   #53
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Default Re: Cashing in final salary pension.

Can anyone offer an update on this regarding the tax implication of cashing in a U.K. final salary pension. There must be a lot of people in the same boat who have or would like to cash in the DB pension and move it to a DC pension with some of the generous multiples on offer.
If not can anyone recommend a Canadian tax firm or advisor who might be up to speed on this.
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Old Dec 28th 2017, 5:12 pm   #54
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Default Re: Cashing in final salary pension.

I have my uk financial advisor looking into this but just wondered if anyone could add anything
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Old Dec 28th 2017, 5:58 pm   #55
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Default Re: Cashing in final salary pension.

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Originally Posted by eaglestorm View Post
I have my uk financial advisor looking into this but just wondered if anyone could add anything
Received wisdom from reading various threads here is that you can't, or rather you risk a substantial Canadian tax bill. I wonder whether a FA either here or there can provide a definitive answer as it seems that even the CRA can't?! I'm interested in the outcome of your investigations though as I have a couple of Final Salary schemes in UK that I'd be interested in cashing in.
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Old Dec 28th 2017, 6:02 pm   #56
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Default Re: Cashing in final salary pension.

I am about to set things in motion, both my wife and I have UK Company pension plans that we are looking to transfer into SIPP's this year since the QROP option appears to have gone for now, and possibly forever who knows.
My wife got a transfer value 11 months ago just before the window closed and I can actually get my transfer value off my old UK Company employee website.
There is nobody in Canada that can, or will, help with a transfer into a SIPP that I am aware of. I have selected and been in contact with a representative from a International financial management company that deals with Ex Pats financial issues including Company pensions.
Contrary to what some people say there is no Canadian CRA involvement until you actually start drawing money from the pension, whether it's still with the company or whether it has been transferred to a SIPP. The transfer of the UK Company pension into a UK SIPP has nothing at all to do with the CRA, unless you elect to take a cash option along with the transfer or you decide to start making withdrawals straight away.
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Old Dec 28th 2017, 6:24 pm   #57
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Default Re: Cashing in final salary pension.

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Originally Posted by Kentonmag View Post
Contrary to what some people say there is no Canadian CRA involvement until you actually start drawing money from the pension, whether it's still with the company or whether it has been transferred to a SIPP. The transfer of the UK Company pension into a UK SIPP has nothing at all to do with the CRA, unless you elect to take a cash option along with the transfer or you decide to start making withdrawals straight away.
Interesting. I am not looking to take anything out at all for 10-15 years. Isn't the other obstacle finding a SIPP provider who we deal with a non-UK resident?
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Old Dec 28th 2017, 6:50 pm   #58
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Default Re: Cashing in final salary pension.

I am 61 years old and, along with my wife, looking to retire in 2018. If I wasn't contemplating retiring I would not be looking to move my Company pension into a SIPP, or a QROP's for that matter, even if they were available. My transfer value, in my old Company, is still growing at better than 7% per annum due to the original terms of the pension and the GMP portion of the plan. There is nothing out there that can guarantee you a 7% return. Since you are 10 - 15 years away I would make a yearly request for the transfer value for at least another 2 - 3 years and see what the growth is. If you are getting similar growth margins on the GMP to what I am, I would wait before thinking about transfers. Just my thoughts.
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Old Dec 28th 2017, 6:57 pm   #59
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Default Re: Cashing in final salary pension.

As I said I am dealing with an international financial advisor, they set it up and they also recommend the SIPP to invest, no different to TD Waterhouse telling you what to invest your RRSP's in, in Canada. Make no mistake there are fees both initially and then ongoing, you get nothing for nothing in this world but my brother who lives in the UK and who transferred into a SIPP from the same company pension plan as me, also had plenty of fees.
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Old Dec 29th 2017, 1:42 am   #60
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Default Re: Cashing in final salary pension.

That’s encouraging to read re moving from a final salary pension to a SIPP. When I have some feedback from my advisor I will post here. He has clients who have done this in Canada with no issues but for my piece of mind he was going to confirm it .
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