READ ME. PENSION RULES UK to Canada
#91
Re: READ ME. PENSION RULES UK to Canada
we challenged this and still have to go to Tax Court on the remaining $8k because my husband was not working, he was fired when he had to return to duty in the UK following his three year career break and in order to retire from the Police. Asked for six weeks and was told no, as was a holiday balackout period over Christmas. But his return to Duty was a duty commitment and not a vacation and he had to work a month in order to take his early retirement. So hie earnings were knly EI and reduced EI because of the pension income too. I also shared his pension as I was on low earnings, so he could not owe $8k in tax on an income of under $20k. CRA worked with his UK figures when they should not have done once they were made aware that it fell under the 25% tax free criteria.
#92
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Re: READ ME. PENSION RULES UK to Canada
thanks, Stef
#93
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Re: READ ME. PENSION RULES UK to Canada
we challenged this and still have to go to Tax Court on the remaining $8k because my husband was not working, he was fired when he had to return to duty in the UK following his three year career break and in order to retire from the Police. Asked for six weeks and was told no, as was a holiday balackout period over Christmas. But his return to Duty was a duty commitment and not a vacation and he had to work a month in order to take his early retirement. So hie earnings were knly EI and reduced EI because of the pension income too. I also shared his pension as I was on low earnings, so he could not owe $8k in tax on an income of under $20k. CRA worked with his UK figures when they should not have done once they were made aware that it fell under the 25% tax free criteria.
we are argueing the remaining $8k as a result of them working with figures they should not have.
#94
Re: READ ME. PENSION RULES UK to Canada
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.
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.
"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,
- (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,
- (i) a superannuation or pension benefit including, without limiting the generality of the foregoing,
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.
#95
Re: READ ME. PENSION RULES UK to Canada
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!
#96
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Re: READ ME. PENSION RULES UK to Canada
#97
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Re: READ ME. PENSION RULES UK to Canada
Thread resurrection
Did anyone appeal paying tax on the lump sum and if so any results??
Did anyone appeal paying tax on the lump sum and if so any results??
#98
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Re: READ ME. PENSION RULES UK to Canada
Send me your email in my PM and I will send you a copy of the part of my CRA appeal letter which covers this
You dont have to declare it if it is up to 25% andtax free in the country of Origin.
You dont have to declare it if it is up to 25% andtax free in the country of Origin.
#99
Re: READ ME. PENSION RULES UK to Canada
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.
#100
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Re: READ ME. PENSION RULES UK to Canada
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.
#101
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Re: READ ME. PENSION RULES UK to Canada
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.
stef
#102
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Re: READ ME. PENSION RULES UK to Canada
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
#103
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Re: READ ME. PENSION RULES UK to Canada
I have tried to do this twice. I dont have a problem with posting it, but I have tried and failed twice. If you think it would be helpful to have it where everyone could access it, I agree. If you PM me I will send it to you via email and you can play around with it and post it on my behalf with the disclaimers as suggested. I have never given it to anyone as legal advice and have told them our story and suggested the way forward for people. Whether they choose to do something is entirely their decision. I am upset by John boy E’s comments and I do appreciate that he has been doing this for years as a job. That We got lucky and that it wasnt to be believed and your support of his stance in telling people of his experience in these matters making me feel that you are somehow calling me a liar. Sorry, but I dont do this to gain, just to help people to understand what has happened in our case. It is in writing for CRA, I have not made this up. As I have said before, the trolls and comments on this site are worrying at times, part of the reason I stopped posting for a long time. This matter I deemed important to get out there.
please send what you have written back to me for my final approval, is all I ask
stef
please send what you have written back to me for my final approval, is all I ask
stef
Last edited by lins and Stef McLachlan; Sep 1st 2018 at 11:47 am.
#104
Re: READ ME. PENSION RULES UK to Canada
I have tried to do this twice. I dont have a problem with posting it, but I have tried and failed twice. If you think it would be helpful to have it where everyone could access it, I agree. If you PM me I will send it to you via email and you can play around with it and post it on my behalf with the disclaimers as suggested. I have never given it to anyone as legal advice and have told them our story and suggested the way forward for people. Whether they choose to do something is entirely their decision. I am upset by John boy E’s comments and I do appreciate that he has been doing this for years as a job. That We got lucky and that it wasnt to be believed and your support of his stance in telling people of his experience in these matters making me feel that you are somehow calling me a liar. Sorry, but I dont do this to gain, just to help people to understand what has happened in our case. It is in writing for CRA, I have not made this up. As I have said before, the trolls and comments on this site are worrying at times, part of the reason I stopped posting for a long time. This matter I deemed important to get out there.
please send what you have written back to me for my final approval, is all I ask
stef
please send what you have written back to me for my final approval, is all I ask
stef
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!
#105
Re: READ ME. PENSION RULES UK to Canada
Could you add it to one of the Canadian tax or pension wiki's please?
https://britishexpats.com/wiki/Speci...=Pension&go=Go
https://britishexpats.com/wiki/Speci...=Pension&go=Go