Oops218

Hi there,

I got one question I am very concern about now :

I read somewhere if you received lump sump pension before 55 years old, it would be regarded as non authorised pension by HMRC, so the tax would be up to 55% .

Is it true？ I didn't know this rule before so had chosen to take lump sump pension after I left Canada but the pension was from my last job In Canada.

I have tried to find more information from Hmrc website but still not sure. Even ask HMRC helpline , the advisor couldn't help.

Does this lump sum pension from Canada is unauthorised pension? I received it late and have been uk tax resident . I read some people said it should be your income . Can anybody with this experience help clarify ?

Thanks

Editha

Can you explain what you mean by a 'lump sum pension'?

Siouxie

As JonboyE explained to you in your post in the Canada Forum, this only applies to pensions based in the UK, not pensions paid out from Canada. Hopefully others can confirm that for you and put your mind at ease.

nun

Canadian pensions paid to UK residents are generally only taxed in Canada. Have a read of Article 17 of the UK/Canadian tax treaty.

Editha

My husbands two Canadian pensions are both taxed in the UK. I don't understand how Nun interprets Article 17:1 to mean otherwise:

Oops218

My one is lump sum , one off payment, it might be different from periodic pension

nun

Yeah sorry, I wrote the opposite of what I intended. Periodic payments from a Canadian pension to a UK resident would normally only be taxable in the UK under Article 17 of the treaty.

However, a lump sum is not a "periodic payment" so I would imagine the Canadian early withdrawal penalty and withholding will apply as well as a large UK income tax bill in the year the income is taken.