Police pension - Can it be taxed twice?
#31
Forum Regular
Joined: Feb 2008
Location: Lincolnshire
Posts: 291
Re: Police pension - Can it be taxed twice?
A friend of mine who works in International Banking advised me that it is best to continue having your pension paid into a UK bank account gross and then you have more flexibility about the frequency and amount you transfer into your Canadian bank account.
She said this could reduce transfer costs if you transfer less frequently and help to take advantage of exchange rates - spot rates, etc.
She said this could reduce transfer costs if you transfer less frequently and help to take advantage of exchange rates - spot rates, etc.
#32
BE Forum Addict
Joined: Aug 2006
Posts: 3,124
Re: Police pension - Can it be taxed twice?
I think it's a sweeping statement to say this is not a good move. I agree it is a tax referral scheme, but it did allow this delay, and also allows any capital growth to be untaxed until it is taken out. Different individuals have different issues, and it suited me, but will not suit everyone.
I was just letting the OP know one of the options.
I was just letting the OP know one of the options.
At no point did you warn of eventual taxation when the funds are withdrawn and, worse still, in your last sentence you wrote '... If I took the money in the normal way it would have been taxed as income here'
While you are letting the OP know the options you failed to inform of the eventual consequences.
Last edited by montreal mike; Oct 1st 2008 at 8:26 am.
#33
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Thread Starter
Joined: Sep 2006
Location: Black Creek, Vancouver Island since December 2012
Posts: 1,385
Re: Police pension - Can it be taxed twice?
Thanks to everyone for their contributions here. I am relieved to hear that fairness prevails and that I would only be taxed once on my pension.
I will be retiring with a 'short service' pension because we have applied to come to Canada 5 years short of the full 30 yr service so that our children can come too and before we lose points for being over 49.
We are in the SW queue because I need to work my 25 years out which will be in 2 years time but I won't receive my pension until I am 50, which will be in 4 years time. It's likely, (so long as we are accepted), that we will get PR before I am 50 so I will probably be in the position of having to pay tax on the lump sum. I will make sure that I get legal advice before hand though.
Thanks again to all.......
I will be retiring with a 'short service' pension because we have applied to come to Canada 5 years short of the full 30 yr service so that our children can come too and before we lose points for being over 49.
We are in the SW queue because I need to work my 25 years out which will be in 2 years time but I won't receive my pension until I am 50, which will be in 4 years time. It's likely, (so long as we are accepted), that we will get PR before I am 50 so I will probably be in the position of having to pay tax on the lump sum. I will make sure that I get legal advice before hand though.
Thanks again to all.......
#34
Forum Regular
Joined: Jan 2007
Posts: 165
Re: Police pension - Can it be taxed twice?
I will be taking a military pension to canada and i hope that it wo'nt be double taxed, but the lump sum thing, i read the wiki article on taxes and the whole residence for tax purposes thing and what the definitions of residence are such as 'social contacts' does this mean in-laws ? I'm thinking this will affect the timing of my application ? anyone else having these thoughts ?
#35
BE Forum Addict
Joined: Aug 2006
Posts: 3,124
Re: Police pension - Can it be taxed twice?
This thread has served a useful purpose. What strikes me is that what is tax free in one jurisdiction isn't necessarily so in another.
The lump sum not being taxed in the UK surprises me; after all it is income isn't it, or am I missing something?
The lump sum not being taxed in the UK surprises me; after all it is income isn't it, or am I missing something?
#36
Binned by Muderators
Joined: Jul 2007
Location: White Rock BC
Posts: 11,686
Re: Police pension - Can it be taxed twice?
As income is taxed in the year you receive it a lump sum from a pension will likely be taxed at the highest marginal rates. There is obviously some scope for tax planning if it is possible to delay becoming tax resident in Canada until the day after the lump sum is received.
Another little quirk is that part of US pension income is considered tax free in the US. Canadian law does recognize the tax free status of this income. It would be interesting if someone in receipt of a tax free lump sum from the UK would challenge the CRA, arguing that the provisions that recognize the tax free status of the US pension income should equally apply UK pension income. Any volunteers?