UK Pension transferred to Canada under QROPS
Hello, I'm a Canadian/UK dual citizen who lived in the UK for 17 years. I returned to Canada in 2015 and re-established residency here. I also made sure to officially wrap up my tax affairs with HMRC. At that time I transferred my UK pension to a Canadian QROPS (Qualifying Recognised Overseas Pension Scheme), basically an RRSP with Manulife Mutual Funds. This was a one off lump sum transfer, and it has been growing modestly ever since. I now want to take more control of these funds and invest more efficiently (lower fees, different allocation of asset classes etc) . However, I can't find any guidance as to what I can do with the mutual funds that are held in my QROPS RRSP. There is some advice on how to carry on making transfers into a QROPS from a UK based pension scheme, the onus is upon me to ensure the scheme continues to meet HMRC requirements etc, otherwise there are tax implications. However, I can't seem to find any specific advice on how I can deal with my one off lump sum from 3 years ago. It would appear that Canada no longer has ANY QROPS's, something changed in April 2017 that seems to have knocked Canada off the list of countries that have QROPS's.
Does anyone have any similar experience? Can I just transfer my mutual funds into a new account, or will this somehow trigger a tax liability with HMRC? |
Re: UK Pension transferred to Canada under QROPS
There's plenty of threads on this subject on BE. But the short answer to your question is that there is currently a status quo in QROPS and you cannot move this money from your current provider without incurring a hefty tax penalty.
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Re: UK Pension transferred to Canada under QROPS
There are presently no QROPS providers approved in Canada.
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Re: UK Pension transferred to Canada under QROPS
We're in no man's land I think, in limbo.
Who knows if where we currently house our funds is even valid any more?! There used to be timeline rules that if you withdrew the funds before 5(??) Years, the QROPS had to report back to UK tax authortes, but if these Canadian funds are not recognized and dont qualify, why should they report back any activity? Who would have jurisdiction? It would seem that we can't transfer them out to a 'regular' RRSP either. Bit of a mess. So hopefully yours are still growing. |
Re: UK Pension transferred to Canada under QROPS
Have you spoken to the person who manages your money? Can you not move them into a different fund or individual shares within the same RRSP account? I moved mine to BMO Nesbitt Burns when I did mine, and I have the option of various investments.
Originally Posted by ExpatCanadian
(Post 12585409)
Hello, I'm a Canadian/UK dual citizen who lived in the UK for 17 years. I returned to Canada in 2015 and re-established residency here. I also made sure to officially wrap up my tax affairs with HMRC. At that time I transferred my UK pension to a Canadian QROPS (Qualifying Recognised Overseas Pension Scheme), basically an RRSP with Manulife Mutual Funds. This was a one off lump sum transfer, and it has been growing modestly ever since. I now want to take more control of these funds and invest more efficiently (lower fees, different allocation of asset classes etc) . However, I can't find any guidance as to what I can do with the mutual funds that are held in my QROPS RRSP. There is some advice on how to carry on making transfers into a QROPS from a UK based pension scheme, the onus is upon me to ensure the scheme continues to meet HMRC requirements etc, otherwise there are tax implications. However, I can't seem to find any specific advice on how I can deal with my one off lump sum from 3 years ago. It would appear that Canada no longer has ANY QROPS's, something changed in April 2017 that seems to have knocked Canada off the list of countries that have QROPS's.
Does anyone have any similar experience? Can I just transfer my mutual funds into a new account, or will this somehow trigger a tax liability with HMRC? |
Re: UK Pension transferred to Canada under QROPS
I had a financial emergency a few years ago (circa 2011) and needed to jump through a lot of hoops to transfer funds out of my then-QROPS-qualified fund in Canada. I don't remember all the details, but in essence I seem to recall it was a three-step process.
Most QROPS funds were, of necessity to meet the old requirements, held in a locked-in fund (LIRA - locked-in retirement account - is an acronym I recall). Step one is to unlock this account. THe rules may well have changed in the intervening years, but at the time this, I believe, needed a "financial hardship appeal" to CRA in order to remove the financial penalties for moving funds from a LIRA. Next you need to ensure you're reporting what you need to report to HMRC. Again, the rules may well have changed, but there were different implications in terms of either reporting limits or penalty liabilities depending on how long the funds had been in their receiving QROPS fund. Since HMRC has effectively closed the book on Canada, I reckon you'd have an interesting time arguing in either direction for whether these restrictions still apply. Finally, when you've got the funds into a more flexible Canadian vehicle and done all the required reporting on both sides of the pond, you can do what you want with the money within the rules of the Canadian tax system. In all cases you would be well advised to find a financial adviser who knows how this all works. My guy, an Edward Jones agent, had a whole load of help from his central office, and many weeks of back-and-forth with CRA and HMRC, before the whole thing was sorted out. It was a fairly stressful time for me (caught up in PR processing delays after being packaged out of a job, so not allowed to work in Canada for a while), so my recollection of details is probably somewhat sketchy. It was a difficult and long-winded process back then; the situation is unlikely to have got any simpler with all the changes in rules in the intervening few years. |
Re: UK Pension transferred to Canada under QROPS
Originally Posted by shelley748
(Post 12585824)
Have you spoken to the person who manages your money? Can you not move them into a different fund or individual shares within the same RRSP account? I moved mine to BMO Nesbitt Burns when I did mine, and I have the option of various investments.
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Re: UK Pension transferred to Canada under QROPS
There was some talk a few months ago on this forum saying that WealthSimple, which has businesses in both Canada and the UK is working on setting up ROPS registration with HMRC. If it happens though, it won't be available for some time:
I have to few posts to be allowed to post a URL here so search for will-canada-make-rops-list-ever-again-914821 (post12534857). |
Re: UK Pension transferred to Canada under QROPS
Originally Posted by Edo
(Post 12585534)
There's plenty of threads on this subject on BE. But the short answer to your question is that there is currently a status quo in QROPS and you cannot move this money from your current provider without incurring a hefty tax penalty.
I moved to Canada and transferred my UK pension as one lump sum in 2012. Originally i was told i cannot touch it for 5 years, but after that i can indicate how i want it invested, etc. I just spoke with Scotia and they have no idea what I can do with it. They are telling me they have to approach HMRC for permission to make any transfer/ change/ withdrawal?! I was asking what if i transfer it to another financial institution for them to invest it- well, it will be a process and they will have to still approach HMRC. What a mess Someone mentioned they got help from Wealthsimple as they had experience with such cases. I am wondering if this is what I should do. |
Re: UK Pension transferred to Canada under QROPS
Originally Posted by mia007
(Post 12694250)
Are there any updates from this year on the topic?
I moved to Canada and transferred my UK pension as one lump sum in 2012. Originally i was told i cannot touch it for 5 years, but after that i can indicate how i want it invested, etc. I just spoke with Scotia and they have no idea what I can do with it. They are telling me they have to approach HMRC for permission to make any transfer/ change/ withdrawal?! I was asking what if i transfer it to another financial institution for them to invest it- well, it will be a process and they will have to still approach HMRC. What a mess Someone mentioned they got help from Wealthsimple as they had experience with such cases. I am wondering if this is what I should do. https://www.gov.uk/guidance/check-th...ification-list |
Re: UK Pension transferred to Canada under QROPS
I transferred mine to where I work in 2014 - its an RRSP so I can do with it what I want. What age are you if you don't mind me asking
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Re: UK Pension transferred to Canada under QROPS
and how have Scotia got it set up? Is it an RRSP or a LIRA?
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Re: UK Pension transferred to Canada under QROPS
Originally Posted by shelley748
(Post 12694322)
I transferred mine to where I work in 2014 - its an RRSP so I can do with it what I want. What age are you if you don't mind me asking
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Re: UK Pension transferred to Canada under QROPS
RRSP of sorts, their advisers are a pain. Everyone gives you a different opinion, not sure who I should speak with to have this sorted. If i cannot withdraw it in cash, at least let me put it into plan and gain some interest as little as that might be.
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Re: UK Pension transferred to Canada under QROPS
which province are you in?
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