Edo

Solution:

Eliminate as many parties from the above as you can and take some control of your pension. You may or may not be able to control your QROPS 100% from the investment and/or withdrawal point of view, but trust me you will save a ton of money if you have one entity in the game instead of three.

The BMO option that was recently dropped from the list was a really great choice had it stayed on. I hope the big banks do show some interest in QROPS which would be great cuz not only do they offer better investment opportunities for pension funds which have much lower management fees (as compared to the likes of SunLife, Standard Life etc); but they also allow you to deal with them directly through their branches in case there is a problem or you need advice regarding funds rebalancing etc.

dgagitw

I would suggest doing your own research and telling them exactly what to invest your fund in. A mix of low cost trackers and ETFs will minimise fees and maximise your returns. If you're in an account that offers a very limited range of investment options then at least go through the ones that are available and pick the ones with the lowest MER.

Edo

I have researched the fund choices that my current pension fund manager provides but I came to the conclusion that neither do I like their funds nor their fee structure. Their lowest MER fees are 100%-150% higher than some well known ETFs in Canada. The index funds that this particular provider offers have terrible year-on-year performance and they do not even offer ETFs.

dgagitw

Looks like you're stuffed then. You seem quite knowledgeable, why did you go with a firm like that in the first place when you could have gone to BMI, CIBC etc and got access to a much wider range of investments?

Edo

Thank you. I wouldn't say I am quite knowledgeable but over the last couple of years I have learned enough about pensions and investments that I know how to save on fees. But I wish I knew what I know now when I was transferring my QROPS.

The reason why I could not choose BMO or CIBC was that none of them existed on HMRC's list at the time. I am really looking forward to the list being revised. Who knows we may end up with some good options of new providers.

nun

In this long thread there has been little mention of fees and ongoing expenses associated with a QROPS. For those that have done the transfer maybe you can share the fees that you are being charged and the funds you have access to. You should know this off the top of your head.

Also mention was made of transferring DB plans.....this is a real mine field because people have a difficult time doing the actuarial calculations needed to see if you are getting a good deal.

Otto The Squid

QROPS are finished now for anyone in Canada.

QROPS): introduction of a transfer charge
As announced at Spring Budget 2017, the government will legislate in Finance Bill 2017 to apply a 25% tax charge to pension transfers made to QROPS. Exceptions will be made to the charge, allowing transfers to be made tax free where people have a genuine need to transfer their pension, where:

both the individual and the pension scheme are in countries within the European Economic Area (EEA) or
if outside the EEA, both the individual and the pension scheme are in the same country, or
the QROPS is an occupational pension scheme provided by the individual’s employer
If the individual’s circumstances change within 5 tax years of the transfer, the tax treatment of the transfer will be reconsidered. The changes will take effect for transfers requested on or after 9 March 2017.

The government will also legislate in Finance Bill 2017 to apply UK tax rules to payments from funds that have had UK tax relief and have been transferred, on or after 6 April 2017, to a qualifying recognised overseas pension scheme. UK tax rules will apply to any payments made in the first 5 full tax years following the transfer, regardless of whether the individual is or has been UK resident in that period.

IDB37

As I understand the proposals, the 25% levy will not apply if the individual and the Q/Rops are in the same Country, so that, in isolation would not impact on those moving themselves and their pensions to Canada.

Albeit, there are no options for doing so right now anyway.

Bleecher

Yep, That's the way I read it to.......any new QROPS transfers from March 2017 will be hit with a 25% tax charge other than if you are transferring the pension to a country where you reside. At last it seems the HMRC are making some sensible decisions .

However as mentioned doesn't help at the moment as there are currently no Canadian providers on the list............... glad I did mine before the changes

Hurlabrick

OK - on board with that, good idea to target people using QROPs simply to transfer to a low-tax country where they have no intention of living.


BUT, there is the new bit where HMRC are saying that if you do transfer under QROPS, any proceeds you take in the first 5 years will be subject to UK tax.


Now leaving aside the fact that there are no QROPs schemes in Canada at the moment. Hypothetically, IF there were Canadian QROPs schemes and IF you did transfer - given the there is a dual taxation agreement between the UK and Canada, does that mean that the first 5 years withdrawals from say a QROPS RRIF would be subject to UK tax and therefore exempt from Canadian tax?? Huh? I can't see Revenue Canada being happy about that!

Edo

All hypothetical, but it would also be interesting to see what happens if you transferred it from one approved Canadian QROPS to another approved Canadian QROPS.

IDB37

Recent article by a legal expert involved in the ROSIIP case highlighting the historic and ongoing highly unsatisfactory situation re Q/ROPS, and seemingly suggesting that HMRC continue to adopt a deliberate Policy to confuse and obfuscate:

Budget 2017 Amendments to the QROPS Regime - a Further Breach of EU Law - Lexology

Edo

So I transferred my QROPS from UK into Canada a couple of years ago. And (after some back and forth) CRA has decided to include the transferred amount into my RRSP room for that particular tax filing year.

I was told by my advisor that neither will QROPS be subject to any taxes in Canada nor will eat up into my RRSP room upon transfer. Was he not correct?

Almost Canadian

He was correct. Did you report it correctly in your tax return?

Edo

Yep, These were the instructions that my advisor provided about filing and were followed:


"For the amount of the transferred value of the UK Pension, put this figure on line 115 (other pensions or superannuation) and then also place this figure on line 232 (other deductions) . Then complete a schedule 7 . On the schedule 7 there is a line where you can show this figure was from a transfer. It is important that this is shown to have been from a transfer."