Hey all,

Question from my partner...

I have a UK pension currently operated by Prudential. I want to transfer this over to Canada - I have been advised this is possible. However, I have to place it into certified pension scheme recognised by Inland Revenue back in the UK - I assume this is so they can keep a track on it. What have others done when transferring private pensions to Canada and if you have done so with which companies?

Any recommendations welcome.

Dave.

You can transfer certain types of pensions. Employer sponsored final salary schemes generally OK, money purchase private pensions are not at the moment.

You should talk to a financial adviser who has some experience with these transfers. There is one who posts on this site now and again, otherwise you will have to ask around.

I don't think the Inland Revenue want to keep an eye on it exactly - but they do want to ensure you only put it somewhere 'trusted' that you can't get at it, but that also won't allow all the funds to go down the toilet either

be very careful, but this is only from the advice i was given by my canadain employers pension advisor
the inland revenue WILL want to know exactly were the money is/has been invested as if you draw one pound from the fund you get hit with a tax bill to 45% of the TOTAL fund.

basically they can still pull your pants down from the UK for more bloody tax.

again this is the advice i was given.everyone's circumstances are different but the laws are quite strict.

best of luck finding a good way of keeping the tax man at bay

We are in the early stages of this process and weren't aware that we could be taxed both in Canada and UK when we eventually reach retirement age and withdraw the funds!! Having read this post, I have just sent an email to our FA for clarification!

i will dig out the e mail i received and post it up, but again i stress this was the advice i was given and yours could be different.
but do check

found it and it goes like this......

Thy Funds once transferred will be converted to CDN Funds. The Funds will be held at GGOF (A fund Company) You can trade in the account in mutual funds, but if you withdraw any funds then they are obligated to report to the UK inland revenue service and you will potentially be taxed heavily on the funds. Thus the UK and Foreign Pension have established that these funds need to be once transferred frozen for 30 days, then for 5 years you can not withdraw (without them reporting back to the UK) They will go into a regular RRSP, You are entitled to open up another regular RRSP (registered retirement saving plan) separate from the UK Pension Funds (This has nothing to do with the company you work for) These funds you can withdraw since they are in separate account and not part of the UK assets (there are other rules we have to apply by and conform with RRSP in Canada with Canada Revenue Agency) We can explain that later that is not a concern re your UK plan now.

According to this site you may be taxed twice. If the Inland Revenue have given you any tax relief on this pension, then sure enough they will want their pound of flesh when you draw on it or at the point where you transfer it out of the country:

http://www.uknetguide.co.uk/Lifestyl...ng_Abroad.html

Our FA got back to us and stated:

..............................As previously stated once you transfer the money to Canada you no longer have a tax liability in the UK in relation to your pensions. There is no initial tax hit when the transfer occurs. You even have to sign Inland Revenue forms when requesting the transfer that state you are severing ties with the UK for tax purposes............................I think I mentioned before that not every Canadian Institution has the same HMRC approved plan ...................You will only be taxed on withdrawals in Canada.

We'll wait and see!!

The key point is that you cannot withdraw funds from the qualifying RRSP that you use to receive your UK pension for 5 years. Of course, if you stayed in the UK you couldn't withdraw any until retirement so this is likely a more flexible arrangement.

If you do withdraw any money from the qualifying RRSP before the five years are up the UK government considers that it has lost its status as a pension fund. Therefore, they will want back all the tax relief they have given you on your contributions. They can take this directly out of the qualifying RRSP so, obviously, this is a very bad thing to do.

Once the 5 years are up you are free and clear from UK tax.

Regarding the transfer of your UK Pension , you are able to transfer it into a QROPS registered scheme in Canada. This will be placed into an RRSP . You are currently able to transfer Occupational Pensions and Personal Pension Schemes, I have transferred both types of Arrangements for my clients. As an Independent Financial Consultant within Canada I have access to most of the companies on the HMRC QROPS list in Canada.

You will not have any tax liability when you transfer the pension to Canada unless you have triggered your Lifetime Allowance limit with the transfer.
This only applies if you have pensions that total 1.65 million pounds ! therefore, most people will not trigger this limit.

Once the funds are transferred they will be placed into your Canadian RRSP.
The rules that are currently in place , require the RSP provider in Canada to report any withdrawls that are made during the first 5 years of you being non resident in the U.K , NOT 5 years from the date that the money is placed in the RRSP. i.e if you have been left the U.K for 4 years , then transfer the pension money into a RSP, the company would have to report any withdrawls for 1 further year !

There are also other factors you should consider before moving the pension from the U.K to Canada , so therefore its important to discuss your options with somebody that can help you make the right decision, and somebody that has experience of dealing with these types of transfers.

This information is correct taking into account the five year rule ! It is very important that the scheme is QROPS qualifying as either you could face a tax penalty or the u.k scheme may not allow it to be transferred.

This is the fellow.

If you transfer your pension to Canada, what happens if you decide to return home? Can you transfer it back?

Or what happens if life takes you to a different country in a few years - United States, Australia, etc?

This is exactly why you have to get the correct advice and make the decisions for the right reasons.

Once you move your U.K Pension to Canada, it cannot be transferred back into the scheme as once it was. It will come under the rules and regulations of an RRSP in Canada.

You are totally discharging the pension from the U.K Scheme.

Therefore if you were only aiming to stay in Canada for a short period of time,and then returning to the U.K, this may not be the right thing for you to do.

That is why it is important to look at everybody's pensions on an individual basis ,as everybodys circumstances are different, what may be right for one person may not be right for another.