Go Back  British Expats > Living & Moving Abroad > Canada
Reload this Page >

UK vs Canada financial side

UK vs Canada financial side

Old Aug 6th 2017, 5:22 pm
  #31  
Lost in BE Cyberspace
 
Almost Canadian's Avatar
 
Joined: Aug 2005
Location: South of Calgary
Posts: 13,373
Almost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by nofrills
That was the reason I opened this tread.
I gave details of how it works in the UK, yet, you have not managed to reply in the same simple terms about how it works in Canada, but are advising me to search on CRA's website.
That's not very helpful, is it?
If I was looking for a specific website, where I could research the subject, I would be asking that specific question, but if you went and read my opening post once again, you would have realised I was looking for simple examples, and not for a complicated tax advice.
I assumed that your reference to not needing to consult a financial advisor in the UK as the information was readily available meant that you were able to source such information on the internet and that you could do so in Canada. As such, I told you where that information was available.

As you appear to be incapable of doing so, I will explain to you that Canadians have the ability to put money into an RRSP. The amount they can put in is set out in legislation and, if you search the CRA's website (or Google information regarding RRSPs) you will discover how much is permitted.

RRPS operate in a similar way to ISAs in the UK in that one can simply hold cash or can use the RRPS to invest in all manner of investments. Again, the rules surrounding what can, and can not, be held via a RRSP is readily available on the internet.


Originally Posted by nofrills
So, not better than in the UK, is it?
For you, it may not be. For me, it is.


Originally Posted by nofrills
Plus, in Canada you are not allowed to make lump sum (25% of your funds) withdrawal, and when drawing your pension, your first £11500 is free of any tax, so clearly better terms and conditions than what Canada has to offer.
On that one issue, yes it is. On the issue of what is can used for I don't believe that it is. You may also wish to research the difference between which beneficiaries can benefit from the content of a RRSP, when compared to a pension in the UK.

In addition, try making a withdrawal from your pension, let's say, at the age of 30 in the UK. A withdrawal from a RRSP can be made at any time in Canada. That may, or may not, be a big advantage.

However, try withdrawing the remaining 75% of that pension in the UK immediately. While I accept that that may have changed since I left the UK, when I left, that simply couldn't be done. That can be done in Canada if one wishes to do so.

Originally Posted by nofrills
In Canada, I suspect a pensioner has to pay income tax on every cent he draws from his private pension.
Your suspicion is wrong. Just like in the UK, a Canadian will pay tax on all of their income over and above their personal exemption.

Originally Posted by nofrills
Plus, obviously there is no option in Canada of a taxpayer being able to save £20K per financial year into an ISA, and earn interest, dividends and capital gains tax free, is there?
The Canadian equivalent is a TFSA. From what you have stated above, you appear to appreciate the difference between the two. I suspect that, as a percentage of the population, there are likely to be as few people in the UK that are able to maximise their allowable contributions in the UK as there are in Canada.
Almost Canadian is offline  
Old Aug 6th 2017, 5:50 pm
  #32  
BE Forum Addict
 
Hurlabrick's Avatar
 
Joined: Apr 2013
Location: London, ON
Posts: 2,485
Hurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Almost Canadian
However, try withdrawing the remaining 75% of that pension in the UK immediately. While I accept that that may have changed since I left the UK, when I left, that simply couldn't be done.
Very minor point, you CAN now withdraw the remaining 75% from age 55 in one go - it is called 'flexible drawdown' (came in, errr..... maybe April 2015-ish, stands by to be corrected!).

Having said that, of course it will attract tax in the tax year as though it were normal income (and of course any even sensible sized pension pot will push you well into the highest tax bracket).
Hurlabrick is offline  
Old Aug 6th 2017, 6:36 pm
  #33  
Lost in BE Cyberspace
 
Almost Canadian's Avatar
 
Joined: Aug 2005
Location: South of Calgary
Posts: 13,373
Almost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond reputeAlmost Canadian has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Hurlabrick
Very minor point, you CAN now withdraw the remaining 75% from age 55 in one go - it is called 'flexible drawdown' (came in, errr..... maybe April 2015-ish, stands by to be corrected!).

Having said that, of course it will attract tax in the tax year as though it were normal income (and of course any even sensible sized pension pot will push you well into the highest tax bracket).
Thanks for that.

Is the rule that an annuity has to be purchased been changed too? If so, then, IMO, that is a great step.

As I am sure you are aware, there is no limit on how much can be taken from a RRSP although, of course, the same issues arise regarding tax.
Almost Canadian is offline  
Old Aug 6th 2017, 8:04 pm
  #34  
BE Forum Addict
 
Hurlabrick's Avatar
 
Joined: Apr 2013
Location: London, ON
Posts: 2,485
Hurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Almost Canadian
Is the rule that an annuity has to be purchased been changed too? If so, then, IMO, that is a great step.

As I am sure you are aware, there is no limit on how much can be taken from a RRSP although, of course, the same issues arise regarding tax.
Yes, all of that was changed with the 'pensions freedom' legislation. With a Money Purchase scheme (e.g. Personal Pension, SIPP etc.) you can buy into an income drawdown - liberate 25% tax free and invest the rest - you can then take the 75% immediately as a taxed amount - all from age 55 of course.

The famous quote from the pensions minister at the time was 'they can buy a Lambourghini with it if they want'.

PS I am recently early retired myself with a personal pension pot so yes, took the 25% and the rest is in an income drawdown.

Last edited by Hurlabrick; Aug 6th 2017 at 8:50 pm.
Hurlabrick is offline  
Old Aug 7th 2017, 8:31 am
  #35  
BE Forum Addict
 
Hurlabrick's Avatar
 
Joined: Apr 2013
Location: London, ON
Posts: 2,485
Hurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond reputeHurlabrick has a reputation beyond repute
Default Re: UK vs Canada financial side

Note that unlike a Canadian RRIF, with an Income Drawdown in the UK you do not HAVE to take any income at all if you don't want to.
Hurlabrick is offline  
Old Aug 7th 2017, 9:46 am
  #36  
BE Enthusiast
 
Joined: Mar 2012
Location: Calgary
Posts: 962
Shakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond reputeShakyuk has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by nofrills
"The comment was about it driving you nuts rather than there was no sense in it. It's one of those swings and roundabout things."

There is nothing about taxation that drives me nuts. Had a simple question about a simple subject, presented it in a simple way, and was expecting an easy, simple answer, but for some reason, some people have decided to twist it and turn to suit their own agendas, such as for example include their idea of preferred lifestyle and what their children think about the new country's lifestyle, which had nothing to do with the subject of the opening post.

As a member who has contributed very little to the board, then coming asking questions about a complex subject such as taxation, I would suggest being more amicable and friendly would be a better way of getting people to respond. The in's and out of taxation in all countries are complex, so complex they require professional qualifications which take years to acquire and even then people become specialists in specific areas of taxation. Something I am sure you're aware of. However you don't seem to appreciate being directed to the relevant Canadian website and instead you'd like someone to give you an 'explanation' using 'simple examples'. But why would anyone go to that site in their own time, digest the information and then regurgitate it for you using simple examples when your responses to this thread have been nothing short of hostile.

Last edited by Shakyuk; Aug 7th 2017 at 9:49 am.
Shakyuk is offline  
Old Aug 7th 2017, 12:33 pm
  #37  
Forum Regular
 
Joined: Jul 2017
Location: Toronto
Posts: 48
Vinny17 is an unknown quantity at this point
Default Re: UK vs Canada financial side

I'm open to numbers from the Economist, the Telegraph, the Indy, AFP, AP, Reuters, even the Spectator. Most any source of news so long as it's fake.

OK - even if you don't like the Financial Post - Take a look at the author of the piece. He works for the CIBC as Managing Director of Tax and Estate planning. I doubt the bank would let him post "fake news" Surely you can agree that is a solid source?

https://www.cibc.com/en/about-cibc/m...-golombek.html

A 93% tax rate? Private corporation tax could make it possible | Financial Post
Vinny17 is offline  
Old Aug 7th 2017, 1:32 pm
  #38  
Happy
 
Howefamily's Avatar
 
Joined: Feb 2009
Location: Nova Scotia
Posts: 2,942
Howefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond reputeHowefamily has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Shakyuk
As a member who has contributed very little to the board, then coming asking questions about a complex subject such as taxation, I would suggest being more amicable and friendly would be a better way of getting people to respond. The in's and out of taxation in all countries are complex, so complex they require professional qualifications which take years to acquire and even then people become specialists in specific areas of taxation. Something I am sure you're aware of. However you don't seem to appreciate being directed to the relevant Canadian website and instead you'd like someone to give you an 'explanation' using 'simple examples'. But why would anyone go to that site in their own time, digest the information and then regurgitate it for you using simple examples when your responses to this thread have been nothing short of hostile.
I was just thinking exactly that.
Howefamily is offline  
Old Aug 7th 2017, 4:13 pm
  #39  
Assimilated Pauper
 
dbd33's Avatar
 
Joined: Mar 2005
Location: Ontario
Posts: 40,014
dbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond reputedbd33 has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Vinny17
OK - even if you don't like the Financial Post - Take a look at the author of the piece. He works for the CIBC as Managing Director of Tax and Estate planning. I doubt the bank would let him post "fake news" Surely you can agree that is a solid source?

https://www.cibc.com/en/about-cibc/m...-golombek.html

A 93% tax rate? Private corporation tax could make it possible | Financial Post
I have no knowledge of the Financial Post, is it in the manner of The Sporting Life?

The managing director of tax planning would, as part of his job, seek to sow panic about taxes so as to drum up business so, no, that’s not a good objective source of tax information.

He is saying that, theoretically, a corporation somewhere in Canada could, with poor tax planning, incur a marginal tax rate of 93%. You are saying that people in Canada experience an actual overall tax rate of 53%. That’s a nude figurine and apricot comparison, even if you believe him, what he says doesn’t matter to individuals and is irrelevant to your argument.

I think you misunderstood my reference to fake news.

Still, this is an engagingly weird thread as even the original post makes little sense in that it focusses on such a narrow and specific issue. One is unlikely to decide an emigration plan based on the mechanism for handling withdrawals from tax deferred savings in each country. The thread on the probability of getting tickets for speeding at various speeds addressed an issue of more relevance to most people. As such, I don`t think we`re doing anyone a great disservice in disrupting it.
dbd33 is offline  
Old Aug 9th 2017, 6:19 pm
  #40  
BE Forum Addict
 
Joined: Jan 2008
Location: Near Kingston, Ontario
Posts: 1,316
shelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond reputeshelley748 has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by nofrills
I've been thinking about both countries and how they compare when it comes to financial aspect.
Lets just assume someone earned the same in the UK as he would in Canada.
What are the tax/ general financial advantages of living in either country.

1. In the UK you can put £20K every year into your ISA and earn tax free interest/capital growth/dividends.
In Canada it is only CAD$ 5K, which is a much smaller amount



2. In the UK if you earn over circa £43K you can invest the amount you earn over £43K into your SIPP and get 40% tax back from the government deposited into your SIPP, where you earn interest/capital growth/dividends tax free, you only get taxed 20% when you retire and start taking money out, plus you can take 25% of your SIPP investment out in as a lump sum, tax free.



What Canada has to offer in this respect? Nothing
Are there any such advantages in Canada?

Thanks
Yes because now we have a Liberal Government who reduced the amount one is allowed to contribute to a TFSA $5500 per year.

Canada has nothing in this regard. You can make contributions to your RRSP up to the maximum allowed per year, you will get a tax break at your marginal tax rate on this. You cannot withdraw 25% tax free, you pay tax on all the withdrawals from your RRSP because you got a tax break to begin with.

The advantage Canada has is the following:

1. Depending on where you live- lower house prices for much more of a house and land.
2. Depending on where you live- lower crime that the UK
3. If you choose to- as a CDN citizen you can go south for up to 6 months each year to get away from the winters.
4. Depending on where you live- the healthcare lists are shorter.
5. For me- less stressful living, in the countryside, happy in my job, quality of life.

I do miss my family in the UK, and the food but the pro's for me outweigh the cons.

As you get older you realise that money and possessions are not everything- its about how you spend the time you have.

A good site to review taxation stuff is

http://www.taxtips.ca/

Last edited by shelley748; Aug 9th 2017 at 6:22 pm. Reason: adding info
shelley748 is offline  
Old Aug 9th 2017, 6:48 pm
  #41  
Dichotomus tinker
 
not2old's Avatar
 
Joined: Aug 2013
Location: Ontario, Canada
Posts: 6,660
not2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond reputenot2old has a reputation beyond repute
Default Re: UK vs Canada financial side

simple me will try to explain the Canadian model.

I haven't a clue how it works in the UK

The maximum RRSP (SIPP) is yearly max of $26,000 or 18% of income

Based on you are employed, tax deducted at source, with a $75,000 taxable income with a $26,000 RRSP contribution the tax savings/refund (depending on which province) will be around $8000 +/- $500. Again depends on your income level to what tax refund you get

Suppose over a 10 year period ones salary & RRSP contributions are the same. the RRSP will be $260,000 + any interest or growth. At the point when a withdrawal is made from the RRSP it immediately becomes taxable as income. If you take out say $100,000, it's possible that you'd pay $40,000 in income tax depending if you have other income, if not it could be as low as $30,000

The TFSA (ISA) maximum contribution is $5500/yr. No tax relief on this

Any interest earned or growth in the account is tax free


.

Last edited by not2old; Aug 9th 2017 at 6:51 pm. Reason: added to the post
not2old is offline  
Old Aug 13th 2017, 7:19 pm
  #42  
Forum Regular
Thread Starter
 
Joined: Apr 2013
Posts: 78
nofrills is an unknown quantity at this point
Default Re: UK vs Canada financial side

Thank you Shelley748 and not2old for taking your time to explain it all to me.
nofrills is offline  
Old Aug 14th 2017, 4:36 pm
  #43  
Forum Regular
 
Joined: Jan 2009
Location: Picton, ON
Posts: 194
Collie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond reputeCollie has a reputation beyond repute
Default Re: UK vs Canada financial side

This
2017 Personal tax calculator - EY - Canada - EY - Canada
may be useful if you want to estimate your income tax - and if your affairs are fairly simple
Collie is offline  
Old Aug 15th 2017, 9:37 pm
  #44  
BE Enthusiast
 
Joined: Mar 2012
Posts: 465
IJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond repute
Default Re: UK vs Canada financial side

ISAs and TFSAs are similar. As others have pointed out, the contribution is now only $5,500 for a TFSA. It was as high as $10,000 for one year, but the new Government decided to reduce it. If you don't contribute all the amount in one year, it is saved for the following year. Whilst with an ISA, it is either use or lose it for the year. So even though the ISA contribution is higher, you have to contribute to it that year. Not the case for a TFSA.
IJ157 is offline  
Old Aug 15th 2017, 9:39 pm
  #45  
BE Enthusiast
 
Joined: Mar 2012
Posts: 465
IJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond reputeIJ157 has a reputation beyond repute
Default Re: UK vs Canada financial side

Originally Posted by Shakyuk
As a member who has contributed very little to the board, then coming asking questions about a complex subject such as taxation, I would suggest being more amicable and friendly would be a better way of getting people to respond. The in's and out of taxation in all countries are complex, so complex they require professional qualifications which take years to acquire and even then people become specialists in specific areas of taxation. Something I am sure you're aware of. However you don't seem to appreciate being directed to the relevant Canadian website and instead you'd like someone to give you an 'explanation' using 'simple examples'. But why would anyone go to that site in their own time, digest the information and then regurgitate it for you using simple examples when your responses to this thread have been nothing short of hostile.
In all fairness, he was very specific with his question. Someone saying their kids are happier in Canada was of little relevance to his enquiries.
IJ157 is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.