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Need a bit of advice!

Need a bit of advice!

Old Dec 25th 2023, 12:49 pm
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Default Need a bit of advice!

Hi
ive posted here before about moving to Canada, something which we have decided against now, as wife and I although still working, are of retirement age.
In short, we both had our PRs which were renewed twice but we didn’t bother renewing them the third time.
My wife and I took out two RRSP plans when we lived in Canada briefly, which I assume are still active and have accrued a good amount over time, as we set them up in 2005.
We also have bank accounts in Canada that have a reasonable amount of money in them.
My question is…does anybody know if it’s worthwhile leaving the RRSP plans running to compound over time or is it better to close them and bring the money to the uk?
Same with the bank accounts…is it better to leave a small amount of funds in the accounts in case we go on holiday there?
Thank u fir you help!
And Merry Xmas everyone!
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Old Dec 26th 2023, 10:46 pm
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Default Re: Need a bit of advice!

Hi and belated Happy Christmas.
I am no expert but I am pretty sure you cannot withdraw from an RRSP until age 65 (but it must be converted to a RIF first). A Canadian witholding tax would likely be applied but if you are tax resident in the UK you should be able to reclaim it though UK tax would be payable on the withdrawn amount. It would seem too much trouble to me to try to maintain the RRSP/RIF in Canada, you don't seem 100% certain they are active but say there should be reasonable amount of funds there, sounds like you do to check on the status of the RRSPs. Have you talked to the institution holding the RRSPs about closing them etc?
Similarly, I would close all Canadian bank accounts. If you do come to Canada (or go pretty much anywhere outside the UK) you could use a pre-loaded card from Wise which will let you pay in local currency wherever you happen to be.
HTH from a snowless and warm Edmonton!
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Old Dec 27th 2023, 3:44 am
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Default Re: Need a bit of advice!

You can withdraw from an RRSP before 65 however it is taxed as additional income as RRSPs are a tax-deferment scheme. I'm not sure how that exactly works if you are no longer living in Canada, whether you have to pay Canadian income tax or UK income tax. May want to research that.
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Old Dec 27th 2023, 3:07 pm
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Default Re: Need a bit of advice!

Withholding tax of 25% will automatically apply to any withdrawal you make. I doubt that Canada will give any of this back to you as you will not be filing a tax return here. You will be able to claim a credit for any tax paid against any tax you are liable to pay in the UK and you will have to determine your optimal withdrawal amounts each year.
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Old Dec 27th 2023, 5:12 pm
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Default Re: Need a bit of advice!

You can withdraw funds from an RRSP any time you want. It is taxable income in Canada. If you are a non-resident when you withdraw the funds there will be a 25% withholding tax. This is your only, and final, tax liability to Canada on the withdrawal.

It is NOT taxable income it the UK. There is no UK tax to pay on the withdrawal so there is no opportunity to claim a tax credit for the Canadian withholding tax.

Any gain or income in the RRSP should be/have been reported as taxable income in the UK.
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Old Dec 27th 2023, 8:24 pm
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Default Re: Need a bit of advice!

Very many thanks to all the valuable replies!

The RRSP plans were set up when we first landed in Canada, and were part of our plans of our new life there.

Sadly, it didn’t materialise well enough for us.
Lots of things have happened in our lives which wouldn’t have happened had we lived there.

That said, at that time, in early 2000, things were better than they are now I’d say. We had everything going for us but it didn’t gel for us then. Hindsight is a valuable thing!

We are in our 60s now and the feeling of writing up it rejigging CVs and attending interviews just doesn’t cut it anymore!

Our present jobs in the uk will be our last jobs and we are happy with that.

I didn’t think it would happen to us, that we would grow old and would slow down, but it’s an inevitable thing that you just don’t think about when you’re in your 30s or 40s!

Now, we are thinking about buying a small apartment in Spain or Portugal as it’s not too far from our children who are up in arms if we move out too far from the uk!

But here again, I’m stuck in limbo land, not deciding fast enough, and now time isn’t on our side.

At the end of the day, we may even cancel everything and just stay out in the uk till we snuff it.

Havent got the getup and go!

Just wanted to offload my frustrations!
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Old Dec 29th 2023, 12:17 am
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Default Re: Need a bit of advice!

Originally Posted by steviewinder546
Very many thanks to all the valuable replies!

The RRSP plans were set up when we first landed in Canada, and were part of our plans of our new life there.

Sadly, it didn’t materialise well enough for us.
Lots of things have happened in our lives which wouldn’t have happened had we lived there.

That said, at that time, in early 2000, things were better than they are now I’d say. We had everything going for us but it didn’t gel for us then. Hindsight is a valuable thing!

We are in our 60s now and the feeling of writing up it rejigging CVs and attending interviews just doesn’t cut it anymore!

Our present jobs in the uk will be our last jobs and we are happy with that.

I didn’t think it would happen to us, that we would grow old and would slow down, but it’s an inevitable thing that you just don’t think about when you’re in your 30s or 40s!

Now, we are thinking about buying a small apartment in Spain or Portugal as it’s not too far from our children who are up in arms if we move out too far from the uk!

But here again, I’m stuck in limbo land, not deciding fast enough, and now time isn’t on our side.

At the end of the day, we may even cancel everything and just stay out in the uk till we snuff it.

Havent got the getup and go!

Just wanted to offload my frustrations!
Looks like your get up and go got up and went before you did!
Hope you have a Happy New Year whatever else happens.
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Old Jan 1st 2024, 7:44 pm
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Default Re: Need a bit of advice!

Originally Posted by Kingsboy48
Looks like your get up and go got up and went before you did!
Hope you have a Happy New Year whatever else happens.
Lol!
Thank you!
Yes it’s a classic case of wasting too much time procrastinating, plus not strong enough to take a risk!
If we had stayed in Canada, things would have worked out ok.
But we had pressing things to do back here in uk too…caring for old parents who weren’t willing to move with us, to make a few.
No harm done. At least we did make the move.
When I breathe my last, at least I won’t have that niggling regret that we should have moved!
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Old Jan 2nd 2024, 2:42 pm
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Default Re: Need a bit of advice!

Originally Posted by JonboyE
You can withdraw funds from an RRSP any time you want. It is taxable income in Canada. If you are a non-resident when you withdraw the funds there will be a 25% withholding tax. This is your only, and final, tax liability to Canada on the withdrawal.

It is NOT taxable income it the UK. There is no UK tax to pay on the withdrawal so there is no opportunity to claim a tax credit for the Canadian withholding tax.

Any gain or income in the RRSP should be/have been reported as taxable income in the UK.
Why is it not taxable as income in the UK but taxable as a capital gain?
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Old Jan 2nd 2024, 5:10 pm
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Default Re: Need a bit of advice!

The UK does not recognize an RRSP as a tax-sheltered account. If you are tax-resident in the UK, and hold an RRSP, it is taxed as a regular savings account so any income or capital gain within the account is taxable in the year it is realized. As it is not a tax-sheltered account, any withdrawal is treated as just getting your own money back. It does not need to be reported as income to HMRC.
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Old Jan 3rd 2024, 6:03 pm
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Default Re: Need a bit of advice!

Originally Posted by JonboyE
The UK does not recognize an RRSP as a tax-sheltered account. If you are tax-resident in the UK, and hold an RRSP, it is taxed as a regular savings account so any income or capital gain within the account is taxable in the year it is realized. As it is not a tax-sheltered account, any withdrawal is treated as just getting your own money back. It does not need to be reported as income to HMRC.
Thank you.
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