Hurlabrick

Just announced in the UK budget. A 25% tax charge on the value of the fund transferred under QROPS (unless within the EU).


Budget 2017: HMRC introduces 25% tax charge on Qrops transfers - Citywire


Can't see many people keen to transfer from the UK to Canada now (unless I have seriously mis-read something in this initial announcement) even if / when any Canadian schemes re-appear on the list!


I have to look into the wording that says there is an exception if the individual and the Qrops are in the same country after the transfer - so may or may not be as serious as it seems at first glance!


And then there is this little gem:


‘Payments out of funds transferred to a Qrops on or after 6 April 2017 will be subject to UK tax rules for five tax years after the date of transfer, regardless of where the individual is resident,’ HMRC added.

Photoplex

Glad I got it out a few years ago then!

Tangram

^^^^ this x100

Bleecher

Edo

Can anyone interpret know what this means:

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:
.
.
........the QROPS is an occupational pension scheme provided by the individual’s employer

dgagitw

Seems to imply that as long as you're transferring the money to the country you live in you're OK, may well have that wrong though.

Hurlabrick

So where you are transferring into your Canadian employers pension scheme, it should be tax free (as opposed to say a personal pension arrangement in Lithuania!

I think what this change is trying to target are those people that use QROPS to try to get around either the age 55 thing or to take the proceeds at seriously reduced rates of tax. Ask yourself why there are so many QROPS registered schemes in Malta - are so many people REALLY going to live there??

Cookie

My husband transferred his pension last year through QROPS. We had a hunch something big might change. Now I'm filing our taxes using TurboTax. Am I right in thinking I enter it as an income but deduct it as a pension trasfer so it cancels itself out?

BristolUK

If you don't get an answer, try this thread and maybe jonboy will pop up

dgagitw

This thread covers it pretty well:

http://britishexpats.com/forum/canad...ansfer-853589/

Cookie

I'm using turbotax online version so can't see form line numbers. From what I can see there are places to enter the info under RRSP section and nowhere to enter under Income. Maybe they've simplified it to just one section???

Edo

You need to find Line 256 to claim this. Make sure you do this right cuz lately CRA has been calling QROPSers out on this.

Cookie

I'll phone turbotax tomorrow then. Think the CRA will be checking on us anyway because we moved from NS to AB and they might want to check the expenses we've claimed.

Turtle

Don't know if the same rules still apply, but we transferred our pensions in 2013 into LIRAs. I called CRA and asked them how it should be shown on the 2014 returns and they told me it didn't need to be. Once we open the RRIF and start to draw the money then it has to be shown as income, obviously, but as far as the CRA were concerned, I didn't need to do anything with the transfer.

Edo

That is very interesting that you were allowed to transfer QROPS into a LIRA. Cuz most QROPS transfers made from UK into Canada land into RRSP accounts due to some HMRC's preference.