Piff Poff

I've just done a quick search and know this question has recently been asked but the answers are a tad confusing and more about TFSA'sIf we were to move to the UK can our Canadian RRSP's move with us or do they have to stay here in Canada. What are the tax implications for either scenario.Simple yes/no and percentage amounts will suffice at this point as we are just trying to figure out our future.Do the rules change once we hit retirement age?

JonboyE

No, you cannot take your RRSPs to the UK. If you withdraw from your RRSPs before you leave the amount is added to your taxable income for the year. If you withdraw after you have left Canada the withdrawal is subject to a 25% withholding tax. A withdrawal from an RRSP is not taxable income in the UK so you don't pay any tax on it there, but you cannot claim a foreign tax credit in the UK so the 25% is lost money. Also, HMRC do not recognize the tax-sheltered status of an RRSP so you have to declare, and pay tax on, any income and gains within the RRSP after you have established tax-residency in the UK.

Piff Poff

Thank you JonboyE. Do we pay tax when we start to withdraw our pension, once at retirement age if we stay in Canada?

JonboyE

As long as you leave the funds in your RRSP you do not pay tax - only on money you withdraw. However, when you reach 71 the RRSP must be converted to a retirement income fund (RRIF). You must withdraw and pay tax on a certain amount of the RIFF each year. The amount is calculated so that the RRIF will last for your lifetime.

jimf

So if you move the RRSP to the UK after you leave Canada you lose 25% of the sum to the CRA? Once in the UK you could use that sum to contribute to a pension and assuming you have generated sufficient earnings and paid tax in the UK you could set the contribution against UK tax? It seems a fairly neutral exercise?

Piff Poff

Thanks again.

Steve_

DT4617 - Double Taxation Relief Manual: Guidance by country: Canada: Withdrawals from Canadian RRSPs/RRIFs

It's even more fun trying to do it the other way around with a SIPP.

Steve_

Yes, to recover the income tax you didn't pay in essence.

You can do anything you want with it, put it in a SIPP whatever, but given that you've just paid a ton of tax on it, putting it in another pension seems pointless. You've already received it. If you want to use it in relation to other earnings well I suppose it's a bit irrelevant.

Depends on the amount I suppose, given that it's post-tax an ISA would make more sense.

daisymoll

We were advised to leave in Canada until retirement, we have ours with HSBC so can see pretty freely.....

Piff Poff

Is this why? No, you cannot take your RRSP