Help ! Advice needed to transfer pensions back to UK
 

Hi everyone,

Please could anyone advise me what to do !!! We moved back 6 months ago ( I definitely recommend it - best Summer ever !!). The only thing is that OH's pension is being taxed at 25%, which should be 0% (then we pay UK tax here) as per the tax treaty.

Been talking to CRA , who advise pension needs to be transferred/remitted to the UK and then it would be 0%. We currently have the pensions sent to RBC account in Canada and then use xe.com to transfer money to our UK account. I thought this would be OK, but apparently not , according to CRA.

The pension provider obviously wants to keep paying in dollars , so how do people deal with this situation. I spoke to Moneycorp currency exchange who can take remittance from Canada and then put into our UK account - but they advised that our pension provider may want to see our name on the account ( we would have a reference number from them and a safeguarded client account ... maybe we could add our name on the reference detail).

They also suggested if the pension provider doesn't go along with this that we may need to open an offshore account which would be in our names, but I really don't want to get into that .

Another option may be to get Canadian dollar cheques sent over to our home address, but this seems to be a very slow way to get the pension money, but has been presented as an option from the pension provider.

Can anyone give me some advice , as to how they deal with this situation .....thanks very much.

We also have CPP and I think they transfer directly into UK bank account.



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What

Re: Help ! Advice needed to transfer pensions back to UK
 

Could you not just open a foreign currency account at a UK bank? :confused:

Re: Help ! Advice needed to transfer pensions back to UK
 

That sounds very straightforward !! Maybe I am complicating it all too much .

Re: Help ! Advice needed to transfer pensions back to UK
 

Several banks have them, though the conditions are not usually great (my USD account has zero percent interest and always has), and the charges can be higher than for sterling accounts. If you are only using it to hold money before you can convert into sterling, those things shouldn't be a major issue.

Re: Help ! Advice needed to transfer pensions back to UK
 

I took a quick look at the UK/Canada Tax treaty and its' similar to most other tax treaties. If your OH pension isn't social security or from the Canadian Government then it is not taxable in Canada if you are a UK resident.

You need to talk to CRA and your pension provider to make sure the pension is paid without any tax deductions. I don't see a need to move the pensions. The CRA might have just meant that you should send the pension income directly to the UK. That should be as easy as giving your pension provider your UK bank's IBAN number and your account number. Transfers from dollar denominated accounts to UK accounts are made every day.

I think you need to file form NR5 and the CRA should apply the treaty exemption to your Canadian pension payments.

http://www.cra-arc.gc.ca/E/pbg/tf/nr5/nr5-fill-13e.pdf

If you are making transfers as a non-resident this form will be useful

http://www.cra-arc.gc.ca/E/pbg/tf/nrta1/nrta1-e.pdf

Re: Help ! Advice needed to transfer pensions back to UK
 

Please tell me how you get on with this. We are going back to the UK next year. My husband will be claiming his Canadian pensions, but they are small because he has only spent 8 years working in Canada since he was 22.

We don't want them paid into a UK bank account because of the loss on the exchange rate, and we've been planning to let the money accumulate in our Canadian bank account and then make a transfer every few months.

I don't see opening a Canadian dollar bank account in the UK as an option, because we would still get charged for the wire transfer.

I agree with nun that the treaty exemption should apply to pension payments, whether they are paid into a bank account in Canada or the UK. It has never occurred to me that what we propose would result in tax deduction in Canada. I suppose it would be possible to claim the tax back each year, but who wants to fill in Canadian tax forms throughout their retirement?

Re: Help ! Advice needed to transfer pensions back to UK
 

You could have a UK-based Canadian dollar account, so you can then exchange whenever you want. Depending on whether the Canadian pension company charge for sending overseas, this might be a better way - the money would be in a bank you can physically go to (some people prefer that), and if the Canadian pension company don't charge for depositing in a UK-based account, you have saved on wire transfer fees, etc.

Re: Help ! Advice needed to transfer pensions back to UK
 

Contact Cashkows - www.cashkows.com they are transferring our pensions. They are fantastic. It is much more difficult than you think. We have to formally immigrate to do it, Cashkows handle everything for you including sorting tax, settling accounts, closing accounts and pay-out/transferring of pensions.

Re: Help ! Advice needed to transfer pensions back to UK
 

This seems to be a South African expat specific company. But the larger point is that the cross border transfer of pensions (eg QROPS in the case of the UK) need to be carefully considered. The firms that do this often charge high up front fees and then get you into investments with fees that continue to eat into your money and you'll obviously take a hit if you cash in an annuity. You need to fully understand the original and new retirement/pension plan returns and fees before embarking on the move. In my experience it's often better to leave pensions alone, taking the income cross-border is often pretty simple.