Mrchuffie1

Hello,

My wife and I are possibly moving back to the UK. My wife has a RRSP with a securities company here in BC. We are aware that before we leave Canada that we have to convert her RRSP to a RRIF which we can then recieve in the UK tax free. I was wondering if anyone has been in a similar situation and could share their experiences. The security company that manages her account together with a credit union don't seem to know anything about this kind of situation and can't even tell us how payments are received in the UK i.e by cheques, direct deposit etc.
Any advice or shared experiences would help as it's a scary move.

Many thanks

Benson55

Be very careful here as Canada and UK share tax information. You have to be taxed in one country or the other so pick the one that taxes you the lowest.
Your government pensions from Canada are classified as income in both countries and have to be declared as such.
The financial penalties in both countries are large so all amounts have to be declared.

Mrchuffie1

Thank you for your reply.
Do you happen to know how RRIFs are paid in the UK? i.e cheque, direct deposit etc.
We have found out that RRIFs are not subject to a withholding tax by Canada due to the agreement they have with the UK, but count as income in the UK.

shelley748

Your provider should be able to tell you that- as the payment is coming from them!! get them to phone their back office who processes RIF payments and they should be able to advise.

Mrchuffie1

Hello Shelley748,
Thank you for the reply. We have been trying to find this out for months and initially were told that we couldn't receive RRIF payments outside of Canada. They then said that they could. We are actually trying to find someone else to manage this for us and hope we get an answer soon.
Bye for now.

deepcpearl

Just to throw a spanner in the works: I've picked up something very different: RRIFs ARE subject to a withholding tax in Canada (after all, Canada deferred collection of that income tax when you earned the money). And whilst Canada taxes you on the income, the UK will tax you on the capital gain realized on the fund, stock, etc. So rather than pay CGT on the previous 25 years' growth, I'm selling everything just before I leave Canada, and buying it back immediately so that the acquisition date is more recent. I don't know if this is the way to do it, but I'm getting conflicting stories from those you would expect to be in the know. Perhaps somebody with more knowledge could chime in?

Mrchuffie1

Hello Deepcpearl,

Thanks for your input. Yes, it;s all very confusing. Our credit union adviser doesn't seem to know what he is doing and so we went to an accountant who found out that the 25% withdrawal tax is not applied to RRIF payments made to people in the UK due to the agreement the UK has with Canada. We are hoping to find an adviser who can shed some more light on all of this before we make a decision to leave Canada.

Thanks, your comments are food for thought.

lf1

We moved back to the UK in 2012 and we have been using KIERAN LYNCH FCA, FCCA, CTA. CHARTERED ACCOUNTANT AND CHARTERED TAX ADVISER, Alsager Cheshire. Very happy with the service Kieran has provided and he has advised us on both UK and CDN tax issues including handling of RRSP’s etc. We found it quite difficult to find someone who was up to speed on UK/Canada tax, so were delighted to find him recommended on this forum. Good luck.

Mrchuffie1

Dear If1,

Thank you very much for the link. This RRSP/RRIF thing seems to be our only stumbling block. All the other Canadian pensions that we will be due are government and municipal which are not considered assets,just income. The RRIF , of course, makes interest which complicates matters. Anyway, your response is much appreciated and I will look into that.

Bye for now.