JimandBettina

Long time no hear guys!

Time is now getting tight and I am sorting out my finances before I come to Canada. This is for tjose who have a UK military pension.

Did you complete a P85 before you left?

Do you get your pension paid into our Canadian bank?

Do you pay tax on it to the UK or Canada?

If you pay Canadian tax, is it merely a question of filing your tax return and paying the necessary taxes?

Anything else I need to think about?

Cheers,
Jim

Almost Canadian

No

No, it gets paid into an English one.

No in the UK, yes in Canada

Yes

JimandBettina

Thanks mate,

Why did you not do a P85?

What did you have to do to get it paid tax free into your UK bank?

Cheers,
Jim

Almost Canadian

I can't recall why I didn't complete a P85 (likely because I didn't know it existed). When I see threads like this, I am reminded to complete one (IR likely owes me some tax but as I left in January and I was a PAYE, I doubt the refund will be so huge I will be able to retire) but then, invariably, I forget to do so.

I was a medical discharge for a condition the Army deemed was attributable to service. In light of this, both my Army pension and my war pension are paid tax free in the UK. They are not huge so I leave them there to enable me to purchase items for family in the UK on a UK credit card and then use internet banking to pay off the credit card.

JimandBettina

Oh OK mate. Have you filled in a tax return yet? If so, how was it?

Almost Canadian

I have completed 5 tax returns since arriving. The pension income is added to my "other" income and I am taxed upon it at my marginal rate.

JonboyE

Not ex-military but ...

You should do. Theye might be a tax refund due and it lets HMRC know you are gone. It could save all sorts of hassle if you return to the UK in the future.

You only pay tax on a pension in the country where you are resident. However, HMRC and your pension provider do not know you are resident in Canada yet so they will withhold at least 10%. You carry on filing tax returns in the UK and claim back as much of this as you can. If there is any you can't reclaim then you deduct this from Canadian tax owing on your pension income.

Once you have filed your first Canadian tax return you send this form http://www.hmrc.gov.uk/cnr/canada-individual.pdf and your pension will be paid without deduction of UK tax.

More or less, yes. For you first year the Canada Revenue Agency (CRA) don't know about your pension income so you pay your tax when you file your return (by April 30th each year). If the amount you owe is more than $3,000 the CRA will want you to pay the next year in installments.

JonboyE

And I should add, if you are taking part of your pension as a tax-free lump sum make sure you do this before you move to Canada. Make sure it is in you account before you get on the plane. It is not tax-free in Canada.

petesdragon

I left the RAF last June , moved to Canada in the August last year, filled out the P85 had to send it the day we left from Heathrow, but got the reply from HMRC saying my new tax code is NT, get my pension paid into my UK account then transfer it with Moneycorp ( others are available) they transfer it for free if your a member of the Forces pension society, cant fault the service from them, money is in my Canadian bank 3-4 days after it goes into UK account, take my pension statement along with my other paperwork to HR Block and they do it all, got a rebate last year so so far so good, hope this helps

chiefmissile

Good advice, i am planning on doing exactly that. Will make sure i have all my commuted part of my pension in my UK account before i set foot on Canadian soil.

Regards

Andrew

Phone Phixer

Depending on the work situation with your OH, you can elect to split pension income to reduce tax paid. As my wife currently stays home to look after our young daughter, I do this, so 50% of my pension is untaxed. Every little helps!!

anunlikelyunion

Same here. By the way, we're just across the water from you. Fareham. Where in Canada are you planning on going?

PortchesterRoyal

Just a question ref pensions. I have a full 22 year RN pension. looking to move to NS next year. Will my pension still be indexed linked and increase after turning 55, when I move over and have full PR?
Thanks
John

anunlikelyunion, we live in Portchester! A small world!

Almost Canadian

Both of my pensions are index linked.

chiefmissile

Hi, living in Fareham at the moment, heading to Brandon in Manitoba next summer if my PR goes well. My Mum Dad and 2 brothers have been there for 20 years, its time to join the flock again. Brandons like a second home anyway, been there around 24 times in the last 20 years.

Regards

Andrew