Kittykerr

im completing my taxes for this year.
in 2009 i transferred my UK police pension to RRSP here in canada.
on my tax return i have put the total amount as RRSP contributions.

however the next box asks
"is this RRSP contribution a designated transfer of eligible income amount? If so, enter the amount that is a designated transfer."

so does it meet this definition? i hope so as it makes my return a lot better!
thanks

JonboyE

Can I ask what form you are completing and what line number you are looking at?

Normally, the funds from your UK pension fund would be transferred directly into an RRSP. That said, I have not dealt with a transfer from a foreign fund so I am not 100% certain. If this is the case the amounts do not normally need to be shown on your tax return.

The company that manages the RRSP that received the funds should send you a T slip or instructions for any tax reporting you have to do.

Kittykerr

its on the quick tax website. just on the page where it asks how much have i contributed to RRSP's in the last year.

i got the T4RSP form which had the relevant amounts for the money i withdrew from my pension transfer and the tax i had paid on it. but the total amount i put into RRSP's i also entered.

i guess its not a designated transfer as if i put it in that box it makes my refund $13500, which is unlikely. if i dont put it in that box its $2000 which is more like my normal returns.

JonboyE

Just report what is on the T4RSP slip and you should be fine.

Kittykerr

that only shows my withdrawal.
yoou sure i dont also need to put in the amount paid in too?

JonboyE

Not 100% sure. If I get time I'll look into it further.

ann m

Just out of interest, (and sorry to thread drift a bit) how much, or what percentage of the total were you allowed to withdraw?

Is this the bit with the condition you have to pay it back in again within a certain amount of time

Kittykerr

You can withdraw up to 30% to a max of $30k I think. But you do pay tax on it in line with your earnings for the year. So the amount you withdraw basically just adds onto your total wages for the year. You don't have to repay it.

The repayment one is you can use the money for a house deposit. And either slowly repay it. Or slowly pay tax on it over the years.

ann m

OK - thanks

jimmydean

Kittykerr sorry for jumping in on your thread..can I ask how long your uk police pension was running for and I assume you are not talking about the tax free lump sum paid out at the end of a police pension?? I'm finishing in the police next year and am just starting to work out the tax issues.....I believe in relation to my UK pension I do not have a choice in where I pay tax (it must be in Canada as I will be resident there) which is fine and obviously will declare my monthly UK pension on my Canadian Tax return at the year end.

Any help you can give me would be aopreciated

JonboyE

I looked into this a bit more though I still haven't found a definitive answer. The amount isn't taxable until you withdraw it from the RRSP so I guess it is probably better to cover your back by reporting things you don't need to report than not report things that you should. With this in mind I suggest:

i) Report the lump sum received from the UK pensions fund as income on line 130.

ii) Show the same amount as a transfer on line 11 of schedule 7. Carry this amount as a deduction onto line 208.

iii) Attach a letter to your tax return giving details of the source of the lump sum and the RRSP account it was transferred to.

iiii) Let me know if you get a response from the CRA.

We have a couple of posters who do pensions transfers for a living. I hoped that one of them would give some insight.

mjwalker007

Hi Ann m

Dependent on what you are asking, there may be two answers to this question.

If you are looking at withdrawing funds for any other reason than the HBP then you can take any amount out of your RRSP ( under normal RRSP rules and regulations). However I have come across a certain company that if you move your pension money to them, they will only allow you to withdraw up to 30 % of the amount you have transferred. This is their particular rule and is not common with most other Canadian QROPS providers.

If you are looking at withdrawing funds for the Homebuyers Plan, you can withdraw up to $25000 (as long as you meet the criteria) per qualifying RRSP ( therefore up to $50,000 if you are a couple and each have an RRSP) without any withholding tax being applied. You then have 15 years in which to repay this back into your RRSP , and each year you would generally repay 1/15th of the amount you have withdrawn.

Hope this has covered both scenarios for you


In regards to the tax return question, I cannot give clients advice on how to fill out their tax return as I am not a qualified tax specialist. However I do give my clients some pointers on what they should be looking for and what they should discuss with their tax advisor.

Have you asked the advisor that you did the transfer how you should complete the tax return ??

Kittykerr

Would that certain company be investors group? I was told I could only
take 30%. But if I had a choice I would take it all out. I started with Calgary police at a young enough age I can do more than a full term here. So my uk pension is over and above.

mjwalker007

Yes, it is Investors Group ! Other QROPS providers do not have this restriction on withdrawls from the RRSP. There are approximately 20-25 QROPS providers in Canada. Some will only allow the money to go into a "locked In'' RRSP however there are also providers that allow the QROPS money to go into a "Non Locked In'' RRSP therefore giving you the maximum amount of flexibility under normal RRSP rules. My clients will generally only place their money with a "Non Locked In'' RRSP provider.

Kittykerr

Hmm. Not too happy then. They told me the law prevented a larger withdrawal. Is there any way I can release it now from them?