Piff Poff

As usual, when things get crappy, we start wondering if we should just throw the towel in, pack up and go home.

We moved our pensions over from the UK. I believe they are now stuck here. Can someone clarify the rules in simple language. Ie, yep your stuffed, you'll get next to nothing, or, it's not as bad as all that.

cheers peeps

Mr Bean

Not quite a hijack, but close to it I suppose, but I have the reverse scenario of a couple of UK pensions that need unlocking and am also looking for the best option.

Sorry Piff Poff

glendem4

Siouxie

You can't transfer your QROPS pension back to the UK, you can only withdraw the funds here on a draw down once you reach pension age (or over 55), I believe. You could arrange for the money to be transferred monthly/annually, once you are able to release it. Check with whichever company/bank is overseeing your Locked In RRSP

Presently, as mentioned, there are no QROPS approved schemes (Locked In- RRSP) in Canada, so you would be unable to transfer them to Canada at this time. Keep an eye open on the HMRC list to see if they ever reopen one... and be wary of those that try to get you to open one in other countries!

Hurlabrick

Yes, it is. Having said that, HMRC did a similar exercise on the Australian list, oh, maybe 4-5 years ago and virtually every ROPS in Australia was removed from the list. Obviously many have since reapplied for listing and agreed with to the HMRC requirements. I believe many 'got around' the main HMRC concern about people taking money from their pensions before age 55 by the simple expedient of on accepting ROPS transfers from people age 55 or older!

Canadian companies have to wake up and realise there is an untapped market there for a small amount of work on their policy admin platforms!

Almost Canadian

Bear in mind that any withdrawals will be subject to a 25% withholding tax, so you will need to look into whether it will be preferable to withdraw it all while you are in Canada (so you may receive a tax refund) or whether you should withdraw it while in the UK where Canada will keep the amount (as you may not be paying tax in Canada) and you will then have to claim a credit for any tax owed in the UK.

Siouxie

Good point.. I had forgotten that.

glendem4

glendem4

Piff Poff

I thought there was a 25% thingy somewhere.

as always, thank you so much everyone.

Almost Canadian

Apples and oranges. Every withdrawal from a RRSP in Canada is subject to a withholding tax, some of which may be reimbursed when the recipient files their taxes in Canada. This may be of limited benefit to an account holder residing outside of the jurisdiction as they, likely, will not have a tax liability in Canada. The tax paid can be credited against the tax owed in another jurisdiction if they have such an agreement with Canada. The UK does and which option is best will depend upon other factors.

Your example means that the recipient would not pay tax in the UK but still loses the with holding tax in Canada and cannot split that tax with their spouse.

Piff Poff

I think it would be too costly for us. I think we will still try Ontario as we've been out of the UK for so long now that both places would take fairly equal adjustments.

Kentonmag

The 25% withholding tax ONLY applies if you are transferring the pension out of the UK into a Country other than the Country you reside in. For instance if you live in Australia, which is included in the QROPs list, and you transfer the UK Company pension to Australia, you DO NOT pay the 25% withholding tax. If you live in Australia and transfer the pension to say Malta, The Cayman Is or somewhere else you would then be subject to the 25%witholding tax. I am currently in the process of transferring my old UK Company pension from Rolls Royce into a UK SIPP (the equivalent of a Canadian RRSP) due to having no QROP's avenues to pursue in Canada. My money will be moved and invested within the next 4 - 5 weeks. It's not my preferred option but I just arrange a quarterly transfer from the SIPP to my Canadian bank to transfer my pension funds. No big deal really.

Atlantic Xpat

Not wishing to hijack Piff Poff's thread but you managed to find a SIPP provider that will handle a non Uk resident and you are confident you wont be taxed in Canada for this transfer?

On the witholding 25% piece, I have a friend who moved back to Oz some years back and he has RRSP funds in Canada which he can't move without paying the 25%. Guess his only option is to take a monthly income - and pay tax on it.

Kentonmag

I can't bring the pension transfer to Canada as we are not on the QROP's list of qualifying Countries anymore. My money will be in the UK and I phoned the CRA to make sure, when I transfer it to a UK based SIPP, that there would be no Canadian tax implications. Once I start drawing from that money, and transferring it to Canada, it will then be classed as income I will then declare it on my Canadian tax forms.
To the other part of your question, I am working with an advisor, who is British and based in Miami. His Company are based in Gibraltar, the Cayman Is but with offices in the UK and my money is going to be transferred into a Vanguard fund.