Lamin

I was hoping I could get some advice or feedback regarding my situation? I have citizenship, live in Halifax and been here nearly 4 years, aged 52. I have a house that I own 75% of (value $420,000) plus some savings ($30,000) invested in various schemes in Canada, I currently save $1000 a month and I am increasing my mortgage by $400 a month. I dont have a great job and I dont actually earn that much, I work a combination of jobs that net me about $32,000 a year.

I have a small 2 bedroom house that I rent out in the UK of which I own 50% off (value 185,000 GBP) - (rest is mortgaged), the rent after outgoings $500 comes to Canada which I use to invest here. I also receive a modest UK military pension $2000 which I also transfer here. I pay UK tax on both my rental and my pension, I also declare both here and I am led to believe that they all work themselves out due to dual taxation rules?

I also have about 25,000 GBP invested in a pension fund in the UK. Its sitting dormant as I can neither pay into it or use it due to my being here and under 55, open to any correction on that. Lastly I have paid into my NI contributions from age 16 to 47 (31 years). I've heard of Class 2 top ups but I dont know much about it, nor if I should contribute to it.

Obviously only being here for nearly 4 years, I contribute to CPP etc but I wont have nowhere near enough time for a full CDN pension.

Now heres the crux, I would like to retire at age 60 but I dont see myself retiring here, I think I will be either back in the UK, Europe, Asia or a combination of them. I am Nomadic by nature and if it wasn't for my daughter I think in all honestly I would be on the move someplace now. I can live a very low maintenance / frugal existence, so feel I actually need very little.

I would really appreciate peoples thoughts or suggestions on how I can best shape my finances to assist in my future? Am I doing things right under the circumstances or are there better methods.

Thanks in advance.

Twitcher1958

Two things jump out to me - we also have UK pensions and UK rental income but don’t pay tax in the UK on them - it’s set up so HMRC know that we declare them to CRA and pay the relevant taxes.
I can dig out the relevant links when I can.

Also Class 2 NI contributions are relatively cheap to buy and for many people would be a good decision- there was a recent thread about it on Pension Issues that you could refer to. You have to satisfy three criteria To be entitled to pay the much lower Class 2 contributions.

Siouxie

Are you declaring assets valued in total over $100,000, held overseas? It's a requirement.. hefty penalties if you don't.
https://www.canada.ca/en/revenue-age...orm-t1135.html

Pulaski

Making additonal voluntary NI contributions is almost certainly worth doing - and yes, you should request/ apply to make Class 2 contributions. If you already have 31 years you will only need to make four years of contributions to reach the total of 35 years for a "full" UK state pension, and if you haven't made any contributions in recent years then you should be able to make a one-off payment to cover years in arrears (up to six years of arrears is routinely allowed), and the cost will be around £150-£155/year, so probably about £610 total for four years. The payback on Class 2 contributions is about six months - in other words for each year you "buy" for around £150 you will increase your pension by an aggregate of £150, once you start drawing it, during the first six months, so this is an investment that is pretty much a no-brainer.

To apply to make addtional NI contributions, and apply to make them under Class 2, you will need to contact the International Desk of the DWP/ NI office in Newcastle.

shelley748

I would love to know how you do that for the UK rental as I intend to rent out UK inherited house at some point and don't want to have to file 2 tax returns.

Twitcher1958

Its covered on the gov.uk site - I struggle to post links here but google UK Non resident landlord to find the info. We did it 10 years ago so I forget the details and don’t have access to them at present but it was a straightforward process.
As mentioned above, you also need to be aware of your responsibilities for reporting assets over 100k on your T1135 form.