spud1963

I wonder if anyone can help with a couple of taxation questions.
My wife received her lump sum pension, it was small 15,000 pounds and was taxed in UK, I have sent a Double Taxation form to my local Canadian Tax Office in early April.
I understand it is stamped and returned, is this to her or the HRMC in UK? If us how long should this take?
My second question is that I will start taking my UK pension later this year, can I start sending the Double Taxation form now so that I can avoid tax being taken at source?
Many thanks

Hurlabrick

Your local CRA tax office should stamp it and return it to you. You then have to send it to HMRC. HMRC took around 3 / 4 months to issue me with our NT tax code (and do a refund for tax withheld at source in the UK from my UK Income Drawdown). BUT, you must also complete an HMRC P85 (Google it) to tell HMRC that you have left for good.

Absolutely! Send the stamped double taxation form immediately you get it back. HMRC should then issue an 'NT' (No Tax) tax code to your pension provider who will then not deduct any tax from income payments made. You do of course have to declare the income payments to the CRA in Canada as overseas income and are taxed in Canada on it.

spud1963

Thanks for the reply, I am now worried why Halifax have not sent the form stamped back yet, 3 months seems a long time.

Hurlabrick

Good question. FYI, I was living in Ottawa at the time and my Canadian tax accountant sent the 'double taxation agreement' form in, but it was sent on to London ON. I signed the form 27 Mar and London sent it back with a covering letter dated 25 Apr. Worth chasing I suggest.

spud1963

So in the post arrived the stamped Double Taxation form from London Ontario, received at Halifax on 24th April, why it was sent to Ontario I have no idea and why it took over two months I have no idea but covering letter apologised for the delay, sending to HMRC today to get refund for my wife.
I will send the same form for my pension that I intend to start taking later this year, my only concern is that the form asks for Pension payers details including reference and when due to start, I will not know these until I start taking the pension, any suggestions?

Hurlabrick

It would seem that the tax office in London ON must specialise with double taxation forms for all of Canada.

I don't know what 'form' you are referring to, but do NOT send the double taxation for (or a copy) to your pension provider, they wont do anything with it. You must send it to HMRC with your P85. Mention to HMRC that you will soon be taking a pension with XXXXXX. HMRC should then set you up as an 'NT' tax code, so when your pension provider checks, they will use 'NT' as you tax code, so NOT deduct any UK tax at source. This is exactly what happened with my UK Income Drawdown.

spud1963

I have just phoned HMRC regarding the Double Taxation Form and the need for details of pension provider, eg ref number and that this will not be know yet. I was advised by them that I could not send them the Double Taxation Form until I had that information, I was also advised that it would take approx. 6 weeks to implement.so that is on top of the time the Canadian Revenue take to stamp the form, roughly a total of 4 months!
I was also told that any tax taken will be refunded by cheque and sent to the address for me in Canada, apparently this changed last year and cannot be paid direct to a UK Bank Account, I said this seems to be a backward step but there is no other option. Oh joy!

Hurlabrick

OK, I get it now. What happened with me is that I was already taking income from my Income Drawdown, and the provider continued to deduct UK tax at source. Then about 3 months after sending my DTA to HMRC, I got the NT tax code and yes, HMRC then did a substantial tax refund by cheque (which I couriered to my daughter in the UK and she paid it into our UK account that we still maintain. You can call your pension provider to see if they can provide you with this information in advance of the payments actually starting, but likely as not they won't be able to. Just resign yourself to a few months of being taxed at source until the NT tax code kicks in.

Oh, and if it makes you feel any better about London ON doing all the DTA's for Canada, IIRC I got notification of NT tax code and refund from HMRC with an office address in the NETHERLANDS!!!