Almost Canadian

So, has a Court made a decision regarding the "win" you believe you have, or was it simply someone at CRA that decided not to pursue their claim against you? Are you aware that, if you take them to Court on the issue raised above, they may decide to reopen their previous decision and have a Court rule on that too?

lins and Stef McLachlan

lins and Stef McLachlan

TonyWFC

Ok - Stef kindly sent me the paperwork. I will quote the relevant part and then paste the relevent part from the income tax act

"A review of the facts and documents submitted indicates that, regarding the lump sum pension amount, the letter you submitted from the (OLD EMPLOYER) dated May 11 2017, indicates that 25% of the total cystallisation amount can be taken as a tax-free lump sum. Sub-clause 56 (1) (a) (i) (C.1) of the income tax act indicates that any foreign pension amount that would not be subject to income tax in the country of origin will not be subject to income tax in Canada"

I then found the part of the Income Tax Act the CRA are referring to.

Amounts to be included in income for year

• 56 (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

  • Marginal note:Pension benefits, unemployment insurance benefits, etc.

    (a) any amount received by the taxpayer in the year as, on account or in lieu of payment of, or in satisfaction of,
    • (i) a superannuation or pension benefit including, without limiting the generality of the foregoing,
      • (A) the amount of any pension, supplement or spouse’s or common-law partner’s allowance under the Old Age Security Act and the amount of any similar payment under a law of a province,
        
      • (B) the amount of any benefit under the Canada Pension Plan or a provincial pension plan as defined in section 3 of that Act,
        
      • (C) the amount of any payment out of or under a specified pension plan, and
        
      • (C.1) the amount of any payment out of or under a foreign retirement arrangement established under the laws of a country, except to the extent that the amount would not, if the taxpayer were resident in the country, be subject to income taxation in the country,
        

C1 being the key part.

For myself this information in invaluable and it looks on the face of it a slam dunk. Indeed Stef has proved that in her appeal. Having said that, I know to my cost of running a business in the UK how costly it can be without getting things like this signed off. For that reason alone, I intend to send this to my accountant (she's British and worked in Canada for the last 10 years) and ask her to comment. I might also engage the likes of PWC and get their take on it. I would rather spend a few $$$ now knowing that if challenged, I have sought out expert advice before proceeding.

Big thanks again to Stef and Iins.

TonyWFC

I have just read Jonboy's detailed explanation in a previous post, where he talks about the CRA'S wording etc - "foreign retirement arrangement rather than pension" This adds to the confusion as he clearly know's what he is talking about!

Siouxie

He does - he is a professional... and a very good one at that.

bats

Thread resurrection

Did anyone appeal paying tax on the lump sum and if so any results??

lins and Stef McLachlan

TonyWFC

Armed with the paperwork Iins and Stef kindly sent me, I have instructed PWC to review. I cannot take a chance as if not allowed, the resultant tax bill would probably put me 6 foot under with the shock.

Sanmar

I also received a tax free lump sum which my accountant says I will have to pay tax on here unless I move it to an RRSP . He spoke to a CRA tax advisor who said all pensions are taxable in Canada . Is the tax free lumpsum considered a part of your pension ? I am so confused by the CRA /income tax wording.

lins and Stef McLachlan

Siouxie

It would be really helpful if you could upload copies of the documents / letters (with any personal info blacked out) to the Wiki so that everyone who needs to find out about it could access them.

This is really useful information to know for many members who are reaching retirement age - both now and in the future ... and this thread may not always be open for people to continue to ask you - or you may not be posting on BE! You can put a get-out clause in the header - "this is not legal advice and the poster gives no guarantee that the information given is accurate - this is just for information and is an indication of what may be possible" or similar, if it makes you feel more comfortable.

Cheers

Could you add it to one of the Canadian tax or pension wiki's please?
https://britishexpats.com/wiki/Speci...=Pension&go=Go

lins and Stef McLachlan

Hurlabrick

If you want to email me your scanned letter, I will black out the personal stuff and upload it to wiki and make a suitable entry.

I am certain that no one is calling you a liar, Joneboy was saying that your assessor made a mistake and did not make a judgement that stands as a precedent, that is his opinion and he is free to express it. It will be interesting indeed to see if anyone else is successful using the information you kindly supplied and also gets the 25% tax free!

Hurlabrick

Stef has emailed me jpg's of the relevant portions of the CRA letter. I will updated the wiki as appropriate in the next few days when I get back from the current road trip!