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Moving back to the uk from cad after 30+ yrs

Moving back to the uk from cad after 30+ yrs

Old Oct 28th 2012, 12:57 am
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Default Moving back to the uk from cad after 30+ yrs

My husband and I have decided to sell up and move to northern Ireland. We have some rrsp's and wonder if it's possible to get them out of canada without paying the 20% withholding tax. We will also have the $ from the sale of our
home here which we will probably have to pay tax on too. Can we move the rrsp's to a uk bank? Any and all advice would be greatly accepted.
PS Just to give some background, I have a British citizen passport and my husband will be going there with a French passport. Oh my gosh it's all so frightening - so many questions.
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Old Oct 28th 2012, 9:08 am
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Default Re: Moving back to the uk from cad after 30+ yrs

Originally Posted by mayflower104 View Post
My husband and I have decided to sell up and move to northern Ireland. We have some rrsp's and wonder if it's possible to get them out of canada without paying the 20% withholding tax. We will also have the $ from the sale of our
home here which we will probably have to pay tax on too. Can we move the rrsp's to a uk bank? Any and all advice would be greatly accepted.
PS Just to give some background, I have a British citizen passport and my husband will be going there with a French passport. Oh my gosh it's all so frightening - so many questions.
Hi and welcome to BE. I am sure you will find lots of help here, I know, that I have. I have just moved back to the UK after 30 years in Canada, so I will have faced some of the same issues that you are now dealing with, but of course I am by no means an expert.

If you collapse your RRSP's they are subject to 25% withholding tax or your marginal tax rate, whichever is higher. I haven't heard about the 20% tax rate. You can always leave them in Canada and draw down on or collapse them later, when you might be in a lower tax bracket. There is a grey area with respect to taxation on the growth portion of your RRSP's as the UK Govt. doesn't recognize them and may tax the growth if you cash them in after you become a tax resident in the UK. I am still trying to get to the bottom of this.

We have left our RRSP's in Canada, for the time being, but did collapse our savings outside of RRSP's so that we can file any gains with our last Cdn Tax Return. Don't think there will be any given the state of things.

If the house, you are selling, is your primary residence then it is not subject to Capital Gains Tax and any profit is yours to keep.

Best of luck with all the preparations. When are you planning to move?
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Old Oct 28th 2012, 9:11 am
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Default Re: Moving back to the uk from cad after 30+ yrs

http://britishexpats.com/forum/showthread.php?t=749574

I hope this link works, it has a couple of articles relating to RRSP's and UK Tax.
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Old Oct 28th 2012, 4:57 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Thank you so much for your reply - I have printed it. I will also check out the link. I did in fact say 20% withholding tax when I should have said 25%

In reference to your second paragraph, I understand the point about leaving the RRSP's in Canada until I am in a lower tax bracket. But, will Revenue Canada still consider us to be resident if we leave our bank account open. Therefore, we would still be resident and liable for taxation, would we not? Sorry, for my ignorance, but this is all new to me.

We have started selling off some of our worldly possessions already (practically giving the stuff away, as I'm sure you did). We're hoping to sell the house next year in late summer, and move to Northern Ireland in Nov. '13.

I hope you're loving Scotland and that it was all worth it.
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Old Oct 28th 2012, 5:37 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Originally Posted by mayflower104 View Post
Thank you so much for your reply - I have printed it. I will also check out the link. I did in fact say 20% withholding tax when I should have said 25%

In reference to your second paragraph, I understand the point about leaving the RRSP's in Canada until I am in a lower tax bracket. But, will Revenue Canada still consider us to be resident if we leave our bank account open. Therefore, we would still be resident and liable for taxation, would we not? Sorry, for my ignorance, but this is all new to me.

We have started selling off some of our worldly possessions already (practically giving the stuff away, as I'm sure you did). We're hoping to sell the house next year in late summer, and move to Northern Ireland in Nov. '13.


I hope you're loving Scotland and that it was all worth it.
I also thought we would have to close our bank accounts,to be considered non-resident for tax purposes, but we have been told, by a professional, that this is not the case. There are other factors, incl bank acct, which help to determine your tax residency. I can't remember off hand what they all are and if I do have them written in my notes, they are not close to hand as they should be in Liverpool dock,with the rest of our things.
I am pretty sure there is an item on tax residents on the CRA website.

We have left our accounts open and prior to moving we opened an account with HSBC, so that we could easily transfer money from a CDN $ acct to a GBP acct in either country.

Yes, we did give away a lot of things, we also managed to sell some and strangely enough I don't, as yet, miss anything. My most precious things are being shipped. Some of the main pieces that I am bringing back are things that belonged to my gran. They went out to Canada after she died and now they are being returned to their home in Scotland.

You are smart to start decluttering now as it will be less stressful for you come the time of the move.

I forgot to mention that there is tax treaty between the UK and Canada, so for the most part you should not be taxed in both countries. As we have chatted about, the only grey area I have found, so far is the RRSP issue.

Last edited by lf1; Oct 28th 2012 at 5:40 pm.
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Old Oct 29th 2012, 12:56 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Yes, you can keep accounts open in Canada. It's not a problem.

Tax residency is determined mostly by where we live for the majority of the year. You need to let Revenue Canada know you're leaving and file a final return, then let HMRC know you're here. Then follow the UK rules. Any income from Canada, such as interest and investment gains, will be reported to HMRC.

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Old Oct 29th 2012, 11:51 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

You are both so kind to have taken the time to reply - I really appreciate it.

I feel better knowing that we don't have to pay that withholding tax and can
leave the money here and take it out gradually.

Again, thank you.
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Old Oct 31st 2012, 6:42 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Originally Posted by mayflower104 View Post
You are both so kind to have taken the time to reply - I really appreciate it.

I feel better knowing that we don't have to pay that withholding tax and can
leave the money here and take it out gradually.

Again, thank you.
As you make withdrawals from your RRSPs tax will be withheld at source. Refer to http://www.taxtips.ca/rrsp/withholdingtax.htm
If the amount withheld proves incorrect vs your total income then there will be an adjustment made in your favour or the Canadian Government.
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Old Nov 2nd 2012, 12:11 am
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Default Re: Moving back to the uk from cad after 30+ yrs

Wow, 30 years is a long time. I bet you'll notice many changes. The UK has changed a lot, from what I've heard and I've only been gone 1/3 of the time you have.

You will probably notice how much more 'continental European' the UK has become in appearance. I noticed it during the 90's and early 00's.
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Old Nov 2nd 2012, 11:48 am
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Default Re: Moving back to the uk from cad after 30+ yrs

Here's my 2 cents worth,

we have converted our RRSP's to RIFF's and will take out either 2 x the minimum (as we are a couple) or 10% of the total.

My understanding is that by keeping within either of these we will not be subjected to withholding tax.


The major prob is our stocks/shares. Here it looks like it is best (?) to sell everything held in Canada, file on our last Canadian tax, and take the (big) hit on tax, transfer the funds to the UK and rebuild our portfolio back up in the UK. We are hoping to avoid Capital gains tax or double taxation which seems to be a very grey area if we sold the (Canadian) stocks while resident in the UK.

My question is in the long run is this (ie the big sell) the best option?

Are there any accountants out there reading this who can give advice?
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Old Nov 2nd 2012, 12:10 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Originally Posted by Paws3 View Post
Here's my 2 cents worth,

we have converted our RRSP's to RIFF's and will take out either 2 x the minimum (as we are a couple) or 10% of the total.

My understanding is that by keeping within either of these we will not be subjected to withholding tax.


The major prob is our stocks/shares. Here it looks like it is best (?) to sell everything held in Canada, file on our last Canadian tax, and take the (big) hit on tax, transfer the funds to the UK and rebuild our portfolio back up in the UK. We are hoping to avoid Capital gains tax or double taxation which seems to be a very grey area if we sold the (Canadian) stocks while resident in the UK.

My question is in the long run is this (ie the big sell) the best option?

Are there any accountants out there reading this who can give advice?
Hi, I am not an accountant, but have obtained some professional advice on CGT as it relates to stocks/shares. It is my understanding that investments outside of RRSP's, LIRA's, etc. are deemed to be sold, by CRA, whether or not you you actually sell them, on the day you leave Canada and subject to CGT. We decided to sell ours before our date of departure and will include any gain/loss on our 2012 tax returns and hopefully avoid any confusion over where tax is payable.

Last edited by lf1; Nov 2nd 2012 at 12:40 pm. Reason: Clarification
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Old Nov 2nd 2012, 1:40 pm
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Default Re: Moving back to the uk from cad after 30+ yrs

Thanks If1,
I agree it looks like is the best option as (as you say) they assume you sold them anyway, and anything can happen in the future (interest rates, inflation, exchange rates etc).

We have been planning this move for 18 months and now it's only a few weeks we are just beginning to realize the full tax situation.
Thank's for all on this thread.

I believe we are now doing the simplest in the long run thing as it would be too easy to run into tax complications down the road when we are on a fixed income and things could go South quickly!
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