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Will Canada make it to the ROPS list ever again?

Will Canada make it to the ROPS list ever again?

Old Jul 11th 2018, 2:22 pm
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Default Will Canada make it to the ROPS list ever again?

Hi guys

So I have been watching this list of HMRC approved ROPS (formerly QROPS) eligible countries. As many of you know Canada was dropped from this list a while ago. Since then there have been two FY budgets in the UK but we did not see any anything changing for the ROPS transfer situation for British Canadians.

Does anyone have any idea if the UK govt will ever consider putting Canada back on this list?
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Old Jul 11th 2018, 3:51 pm
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Default Re: Will Canada make it to the ROPS list ever again?

To be clear it isn't 'Canada' that the 'UK' have dropped from the ROPS list, it is all of the schemes by all of the Canadian providers that HMRC have removed. This is because HMRC issued a directive to each of the schemes wirh their rules and notification requirements, and NONE of the Canadian schemes agreed to the terms within the required timescales, so all were removed. HMRC did somwthing similar to all of the Australian schemes a few years earlier, with ALL of them being removed, many are now back.

So it is up to Canadian financial services providers to create and sign up with HMRC and meet their requirements. No reason why Canadian schemes cannot be accredited again, but it will take a Canadian company to get off their *rse and get accreditation- which in turn is probably driven by perceived demand.....
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Old Jul 11th 2018, 11:56 pm
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Default Re: Will Canada make it to the ROPS list ever again?

The company I work in seem to have other fish to fry and have told us that, unless a 3rd party offers a suitable ROP that we can access, this type of business will no longer be done. Take from that what you will.
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Old Jul 12th 2018, 12:47 am
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Default Re: Will Canada make it to the ROPS list ever again?

I think you're right Hurlabrick.

That said, my UK financial advisor was telling me recently that he has heard grumblings about a Canadian provider being added to the list "soon". I'm not sure of his source, but it sounded like "a guy that told a guy" type stuff. Sadly, they will have missed an opportunity as there are a good number of ex-Nortel employees that are about to lock in a decision about their UK based pension. Without an available ROPS, the Canadian residents will have to leave the money in the UK. Shame!
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Old Jul 14th 2018, 4:52 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by Hurlabrick
To be clear it isn't 'Canada' that the 'UK' have dropped from the ROPS list, it is all of the schemes by all of the Canadian providers that HMRC have removed. This is because HMRC issued a directive to each of the schemes wirh their rules and notification requirements, and NONE of the Canadian schemes agreed to the terms within the required timescales, so all were removed. HMRC did somwthing similar to all of the Australian schemes a few years earlier, with ALL of them being removed, many are now back.

So it is up to Canadian financial services providers to create and sign up with HMRC and meet their requirements. No reason why Canadian schemes cannot be accredited again, but it will take a Canadian company to get off their *rse and get accreditation- which in turn is probably driven by perceived demand.....
Correct. From that lengthy list under Australia they probably have the highest no. of ROPS providers available in their country. There must be something in it for them to be so keen.
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Old Jul 14th 2018, 7:33 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by Hurlabrick
To be clear it isn't 'Canada' that the 'UK' have dropped from the ROPS list, it is all of the schemes by all of the Canadian providers that HMRC have removed. This is because HMRC issued a directive to each of the schemes wirh their rules and notification requirements, and NONE of the Canadian schemes agreed to the terms within the required timescales, so all were removed. HMRC did somwthing similar to all of the Australian schemes a few years earlier, with ALL of them being removed, many are now back.

So it is up to Canadian financial services providers to create and sign up with HMRC and meet their requirements. No reason why Canadian schemes cannot be accredited again, but it will take a Canadian company to get off their *rse and get accreditation- which in turn is probably driven by perceived demand.....
Typical Canadian can't be arsed attitude to anything slightly out of the ordinary. Admin here really sucks and it seems at least in Kelowna anyway that companies just can't be bothered half the time. Nobody checks voicemails, nobody replies to e mails, half the companies don't answer their phones and often take forever to respond to a message left. Our doctor doesn't work Fridays, my wife's GI consultant is never available and their facility doesn't answer phones on a Friday but promises 48 hrs to return call, last time it was over a week! I had an urgent blood work to be done but several hours after call still no requisition sent to lab even though it was within 3 mins walk and calls from lab to consultant were not answered. My wife had bloods done to be sent to a lab in Calgary due to some special testing, the first place wanted to charge their time and fedex charges which the consultant in Vancouver said was wrong as its definitely covered under MSP, so she had them done at Hospital but they never got to Calgary, still to this day nobody knows or cares where they are!
Rant over i transferred my pensions in 2007
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Old Jul 18th 2018, 1:58 pm
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Default Re: Will Canada make it to the ROPS list ever again?

I wanted to provide an update following a phone call with Wealthsimple. According to their adviser they are currently coordinating with their counterparts in the UK to register for the ROPS with HMRC. They expect to be able to support pension transfers within the next year or so.
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Old Sep 18th 2018, 2:55 am
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Default Re: Will Canada make it to the ROPS list ever again?

Very interesting recent decision by a First Tier Tribunal re Q/ROPS below.

Whilst not directly related to Canada (the UK Pensions were transferred to 'QROPS' in Latvia, with funds accessed pre age 55 - clearly outside of all regulations), the content is nonetheless relevant in terms of the wider considerations, particularly in so far as they relate to what constitutes a Q/ROPS, and in respect of 'Unauthorised payments'.

Summary:

Expats win delisted QROPS appeal as judge finds HMRC was too slow - International Investment

Full judgement:

http://financeandtax.decisions.tribu...99/TC06537.pdf

What is perhaps most interesting is that whilst the Tribunal found against HMRC, this was largely only on technical grounds., i.e. failure to go through 'discovery' in good time.

Of more concern is that key arguments put forward by the appellants were rejected (see e.g. P35 onwards), including those related to reliance on Q/ROPS registration etc.. The inference that the Tribinal would have found in favour of HMRC in the event that they had got their 'discovery' act together, is pretty clear.

Overall, the judgement again highlights the need to understand what is an unauthorised payment, and also that appearance on any Q/ROPS list issued by HMRC is absolutely no guarantee that the underlying scheme actually qualifies, then, or at any future time. It is this type of information that was likely not made clear by many Advisors in Canada, (albeit HMRC's opaque and constantly changing requirements over the years has surely also been a contributory factor in the general confusion surrounding the subject).

As such, it further demonstates the quagmire which Q/ROPS has become and gives little comfort to anyone that the situation would be any different even if a Canadian provider does appear/re-appear on the HMRC list at a future time. If e.g.'Wealthsmple' or anyone else gives assurances to HMRC (in order to satisfy ROPS registration requirements) that they categorically will not allow RSP pre age 55 withdrawals arising from ROPS pension transfers, I can't see how this would work, as it would contradict basic RRSP legislation (i.e. withdraw at any time, subject to tax), and as such would surely be open to challenge.

Given the above, any 'Canadian' return to the Q/ROPS marketplace appears fraught with difficulty from all perspectives.
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Old Sep 19th 2018, 7:15 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by IDB37
Very interesting recent decision by a First Tier Tribunal re Q/ROPS below.

Whilst not directly related to Canada (the UK Pensions were transferred to 'QROPS' in Latvia, with funds accessed pre age 55 - clearly outside of all regulations), the content is nonetheless relevant in terms of the wider considerations, particularly in so far as they relate to what constitutes a Q/ROPS, and in respect of 'Unauthorised payments'.

Summary:

Expats win delisted QROPS appeal as judge finds HMRC was too slow - International Investment

Full judgement:

http://financeandtax.decisions.tribu...99/TC06537.pdf

What is perhaps most interesting is that whilst the Tribunal found against HMRC, this was largely only on technical grounds., i.e. failure to go through 'discovery' in good time.

Of more concern is that key arguments put forward by the appellants were rejected (see e.g. P35 onwards), including those related to reliance on Q/ROPS registration etc.. The inference that the Tribinal would have found in favour of HMRC in the event that they had got their 'discovery' act together, is pretty clear.

Overall, the judgement again highlights the need to understand what is an unauthorised payment, and also that appearance on any Q/ROPS list issued by HMRC is absolutely no guarantee that the underlying scheme actually qualifies, then, or at any future time. It is this type of information that was likely not made clear by many Advisors in Canada, (albeit HMRC's opaque and constantly changing requirements over the years has surely also been a contributory factor in the general confusion surrounding the subject).

As such, it further demonstates the quagmire which Q/ROPS has become and gives little comfort to anyone that the situation would be any different even if a Canadian provider does appear/re-appear on the HMRC list at a future time. If e.g.'Wealthsmple' or anyone else gives assurances to HMRC (in order to satisfy ROPS registration requirements) that they categorically will not allow RSP pre age 55 withdrawals arising from ROPS pension transfers, I can't see how this would work, as it would contradict basic RRSP legislation (i.e. withdraw at any time, subject to tax), and as such would surely be open to challenge.

Given the above, any 'Canadian' return to the Q/ROPS marketplace appears fraught with difficulty from all perspectives.
Thanks for sharing the article.

So surely the better thing for HMRC to do in order to keep things simple is perhaps to eliminate the requirement of age 55 for withdrawals
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Old Sep 19th 2018, 7:20 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by Edo
Thanks for sharing the article.

So surely the better thing for HMRC to do in order to keep things simple is perhaps to eliminate the requirement of age 55 for withdrawals
OR, the Canadian ROPS candidate companies agree to ONLY accept customers for RRSP's / ROPs transfers who are already age 55 or older.....
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Old Sep 19th 2018, 7:21 pm
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Default Re: Will Canada make it to the ROPS list ever again?

It would certainly make things simple Edo, but unfortunately, there's more chance of me being elected Pope than the HMRC doing that .

Hurlabrick's suggestion is interesting. Don't know if a carrier could do that without running into any questions of 'discrimination' (?), but it would solve the 'age' problem.Whether it's acceptable to HMRC is anyone's guess.

But, it still wouldn't resolve the unsatisfactory 'self certification' issue of the ROPS list.

Last edited by IDB37; Sep 19th 2018 at 7:29 pm. Reason: Edited to add reference to Hurlabrick's post.
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Old Sep 19th 2018, 7:27 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by IDB37
It would certainly make things simple Edo, but unfortunately, there's more chance of me being elected Pope than the HMRC doing that .

Hurlabrick's suggestion is interesting. Don't know if a carrier could do that without running into any questions of 'discrimination' (?), but it would solve the problem.

Whether it's acceptable to HMRC is anyone's guess.
I may be wrong, but IIRC, that is what happened in AUS a few years back when they were wiped off the ROP's list. A Canadian company could easily set up a 'clone' RRSP product and just change the minimum age at entry so it is a special plan for ROP's only (I used to set products up on Life Office admin systems in the UK and test them for a living, how easy it is depends on the computer system they use!).
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Old Sep 19th 2018, 7:40 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by Hurlabrick
I may be wrong, but IIRC, that is what happened in AUS a few years back when they were wiped off the ROP's list. A Canadian company could easily set up a 'clone' RRSP product and just change the minimum age at entry so it is a special plan for ROP's only (I used to set products up on Life Office admin systems in the UK and test them for a living, how easy it is depends on the computer system they use!).
Interesting.

I seem to remember one of the requirements of a QROPS originally was that it was open to anyone living in the Country concerned. Not sure if this is still the case, but if so, would age restrictions not cut across this stipulation ?

Seems to me the only way anyone could ever feel 'safe' in transferring their Pension to a ROPS is if HMRC's list is changed from one of 'self certification' to one of being 'approved' by them, e.g. on an annual basis. However, as it's highly improbable that HMRC would ever do so, no doubt on grounds of inadequate resources/cost etc., it's always going to place impossible demands on Advisor & Client alike to ensure their carrier always complies with the rules, both at the time of transfer and forever thereafter. Which of course no-one can ever do with any degree of certainty.

Hence the tin of worms.
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Old Sep 19th 2018, 8:46 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by IDB37
Interesting.

I seem to remember one of the requirements of a QROPS originally was that it was open to anyone living in the Country concerned. Not sure if this is still the case, but if so, would age restrictions not cut across this stipulation ?

Seems to me the only way anyone could ever feel 'safe' in transferring their Pension to a ROPS is if HMRC's list is changed from one of 'self certification' to one of being 'approved' by them, e.g. on an annual basis. However, as it's highly improbable that HMRC would ever do so, no doubt on grounds of inadequate resources/cost etc., it's always going to place impossible demands on Advisor & Client alike to ensure their carrier always complies with the rules, both at the time of transfer and forever thereafter. Which of course no-one can ever do with any degree of certainty.

Hence the tin of worms.
….and yet, many other countries have schemes that seem to satisfy the requirements and have a thriving ROPS trade
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Old Sep 19th 2018, 9:02 pm
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Default Re: Will Canada make it to the ROPS list ever again?

Originally Posted by Hurlabrick
….and yet, many other countries have schemes that seem to satisfy the requirements and have a thriving ROPS trade
Indeed.

Unfortunately, they are only thriving until such time as HMRC decide (as they have done retrospectively in the past), to challenge their validity, and rule that they haven't been meeting the rules, unbeknown of course to all concerned.

Canada's Q/ROPS industry was alive & well for many years until HMRC decided to eliminate it, despite no rules having changed re RRSP's/RRIF's etc..

Extract from the HMRC ROPS list web site:

"HMRC will usually pursue any UK tax charges (and interest for late payment) arising from transfers to overseas entities that do not meet the ROPS requirements even when they appear on this list. This includes where the ROPS requirements have changed and where taxpayers are overseas. HMRC will also charge penalties in appropriate cases."

The above is a nonsensical state of affairs. How is anyone supposed to protect themselves against the inaction (or different interpretation of HMRC requirements) of advisors, back offices of Pension carriers, etc. etc.. The judgement posted earlier included reference to a case where Standard Life's own internal audit had found no problem with a QROPS transfer, yet HMRC still challenged it & would have won, had they not been too slow with the discovery process.
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