Pension Transfer - Canada
Jul 20th 2009, 4:33 pm
#1
BE Enthusiast
Thread Starter
Joined: Sep 2008
Location: SW Calgary, AB, Canada!
Posts: 341
Pension Transfer - Canada
Howdy Y'all,
as pension seems to be a hot topic at the moment, i thought i would start a new thread for people to discuss options, and for those who have already done it, to adivse others on where to start!
as pension seems to be a hot topic at the moment, i thought i would start a new thread for people to discuss options, and for those who have already done it, to adivse others on where to start!
Jul 21st 2009, 5:49 pm
#2
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: Pension Transfer - Canada
Hi Paul5455,
With regards to UK Pension's , you are able to transfer your Police pension (or other type of Occupational scheme or Personal Pension) to a Canadian Pension scheme.
The government changed the rules in 2006 which allowed people to transfer their UK Pension schemes to Overseas schemes.The scheme has to be registered with the UK HMRC and they are called QROPS (Qualifying Recognised Overseas Pension Schemes). In Canada your UK Pension money would be transferred into an RRSP (Registered Retirement Savings Plan). This is basically the equivalent of a UK Personal Pension.
However, in Canada, the RRSP is a lot more flexible than pension schemes in the UK. This is why many people who are aiming to stay in Canada, will transfer their pensions across, as there a big benefits to having your money in a Canadian RRSP.
One benefit is that in Canada, the money in an RRSP can be accessed before retiring. Therefore if somebody needed to access their pension funds for an emergency, you can do this. This is not available with a UK Pension. You cannot access a UK Pension until you retire. This a major difference between Canada and the UK.
Also, if you were to die before retirement with a UK Occupational scheme ( i.e a scheme like the Police Force Pension) your spouse could lose up to 50% of that pension overnight ! In Canada, if you die, the FULL FUND Value of the RRSP would rollover to your spouse TAX FREE. Again, this is another major difference between the UK and Canada.
These are just two of the benefits of being able to switch your money into a Canadian RRSP.
The UK has imposed some restrictions on UK Pension transfers, with the main rule being that if you were to transfer your pension to an overseas scheme, and withdraw from this pension within five years of being non-resident from the UK, the HMRC could tax you up to 55% on the withdrawal.
This is to stop people , for example, going to Jersey, cashing in all of their uk pension , then getting the next flight back to the U.K . These rules are in place, clearly stated on the HMRC website, and they do make some sense !!
As mentioned previously, with a UK Pension,whether you wanted to or not , you could not access the Pension until retirement, so even with this 5 year rule in place, we have a lot more flexibility with our pension`s in Canada than in the U.K
The process is straightforward and the timescales involved for getting your money across to Canada, are in general, very quick. Once we have completed the UK Pension paperwork and sent it back, the money is usually in your RRSP within 3 Weeks.
I hope this has made U.K pension transfers a little clearer, and if you need any further information, please post a question or contact me.
Thanks
Mark
With regards to UK Pension's , you are able to transfer your Police pension (or other type of Occupational scheme or Personal Pension) to a Canadian Pension scheme.
The government changed the rules in 2006 which allowed people to transfer their UK Pension schemes to Overseas schemes.The scheme has to be registered with the UK HMRC and they are called QROPS (Qualifying Recognised Overseas Pension Schemes). In Canada your UK Pension money would be transferred into an RRSP (Registered Retirement Savings Plan). This is basically the equivalent of a UK Personal Pension.
However, in Canada, the RRSP is a lot more flexible than pension schemes in the UK. This is why many people who are aiming to stay in Canada, will transfer their pensions across, as there a big benefits to having your money in a Canadian RRSP.
One benefit is that in Canada, the money in an RRSP can be accessed before retiring. Therefore if somebody needed to access their pension funds for an emergency, you can do this. This is not available with a UK Pension. You cannot access a UK Pension until you retire. This a major difference between Canada and the UK.
Also, if you were to die before retirement with a UK Occupational scheme ( i.e a scheme like the Police Force Pension) your spouse could lose up to 50% of that pension overnight ! In Canada, if you die, the FULL FUND Value of the RRSP would rollover to your spouse TAX FREE. Again, this is another major difference between the UK and Canada.
These are just two of the benefits of being able to switch your money into a Canadian RRSP.
The UK has imposed some restrictions on UK Pension transfers, with the main rule being that if you were to transfer your pension to an overseas scheme, and withdraw from this pension within five years of being non-resident from the UK, the HMRC could tax you up to 55% on the withdrawal.
This is to stop people , for example, going to Jersey, cashing in all of their uk pension , then getting the next flight back to the U.K . These rules are in place, clearly stated on the HMRC website, and they do make some sense !!
As mentioned previously, with a UK Pension,whether you wanted to or not , you could not access the Pension until retirement, so even with this 5 year rule in place, we have a lot more flexibility with our pension`s in Canada than in the U.K
The process is straightforward and the timescales involved for getting your money across to Canada, are in general, very quick. Once we have completed the UK Pension paperwork and sent it back, the money is usually in your RRSP within 3 Weeks.
I hope this has made U.K pension transfers a little clearer, and if you need any further information, please post a question or contact me.
Thanks
Mark
Aug 30th 2009, 9:50 pm
#3
Just Joined
Joined: Aug 2009
Location: Lancashire
Posts: 22
Re: Pension Transfer - Canada
Hi Paul5455,
With regards to UK Pension's , you are able to transfer your Police pension (or other type of Occupational scheme or Personal Pension) to a Canadian Pension scheme.
The government changed the rules in 2006 which allowed people to transfer their UK Pension schemes to Overseas schemes.The scheme has to be registered with the UK HMRC and they are called QROPS (Qualifying Recognised Overseas Pension Schemes). In Canada your UK Pension money would be transferred into an RRSP (Registered Retirement Savings Plan). This is basically the equivalent of a UK Personal Pension.
However, in Canada, the RRSP is a lot more flexible than pension schemes in the UK. This is why many people who are aiming to stay in Canada, will transfer their pensions across, as there a big benefits to having your money in a Canadian RRSP.
One benefit is that in Canada, the money in an RRSP can be accessed before retiring. Therefore if somebody needed to access their pension funds for an emergency, you can do this. This is not available with a UK Pension. You cannot access a UK Pension until you retire. This a major difference between Canada and the UK.
Also, if you were to die before retirement with a UK Occupational scheme ( i.e a scheme like the Police Force Pension) your spouse could lose up to 50% of that pension overnight ! In Canada, if you die, the FULL FUND Value of the RRSP would rollover to your spouse TAX FREE. Again, this is another major difference between the UK and Canada.
These are just two of the benefits of being able to switch your money into a Canadian RRSP.
The UK has imposed some restrictions on UK Pension transfers, with the main rule being that if you were to transfer your pension to an overseas scheme, and withdraw from this pension within five years of being non-resident from the UK, the HMRC could tax you up to 55% on the withdrawal.
This is to stop people , for example, going to Jersey, cashing in all of their uk pension , then getting the next flight back to the U.K . These rules are in place, clearly stated on the HMRC website, and they do make some sense !!
As mentioned previously, with a UK Pension,whether you wanted to or not , you could not access the Pension until retirement, so even with this 5 year rule in place, we have a lot more flexibility with our pension`s in Canada than in the U.K
The process is straightforward and the timescales involved for getting your money across to Canada, are in general, very quick. Once we have completed the UK Pension paperwork and sent it back, the money is usually in your RRSP within 3 Weeks.
I hope this has made U.K pension transfers a little clearer, and if you need any further information, please post a question or contact me.
Thanks
Mark
With regards to UK Pension's , you are able to transfer your Police pension (or other type of Occupational scheme or Personal Pension) to a Canadian Pension scheme.
The government changed the rules in 2006 which allowed people to transfer their UK Pension schemes to Overseas schemes.The scheme has to be registered with the UK HMRC and they are called QROPS (Qualifying Recognised Overseas Pension Schemes). In Canada your UK Pension money would be transferred into an RRSP (Registered Retirement Savings Plan). This is basically the equivalent of a UK Personal Pension.
However, in Canada, the RRSP is a lot more flexible than pension schemes in the UK. This is why many people who are aiming to stay in Canada, will transfer their pensions across, as there a big benefits to having your money in a Canadian RRSP.
One benefit is that in Canada, the money in an RRSP can be accessed before retiring. Therefore if somebody needed to access their pension funds for an emergency, you can do this. This is not available with a UK Pension. You cannot access a UK Pension until you retire. This a major difference between Canada and the UK.
Also, if you were to die before retirement with a UK Occupational scheme ( i.e a scheme like the Police Force Pension) your spouse could lose up to 50% of that pension overnight ! In Canada, if you die, the FULL FUND Value of the RRSP would rollover to your spouse TAX FREE. Again, this is another major difference between the UK and Canada.
These are just two of the benefits of being able to switch your money into a Canadian RRSP.
The UK has imposed some restrictions on UK Pension transfers, with the main rule being that if you were to transfer your pension to an overseas scheme, and withdraw from this pension within five years of being non-resident from the UK, the HMRC could tax you up to 55% on the withdrawal.
This is to stop people , for example, going to Jersey, cashing in all of their uk pension , then getting the next flight back to the U.K . These rules are in place, clearly stated on the HMRC website, and they do make some sense !!
As mentioned previously, with a UK Pension,whether you wanted to or not , you could not access the Pension until retirement, so even with this 5 year rule in place, we have a lot more flexibility with our pension`s in Canada than in the U.K
The process is straightforward and the timescales involved for getting your money across to Canada, are in general, very quick. Once we have completed the UK Pension paperwork and sent it back, the money is usually in your RRSP within 3 Weeks.
I hope this has made U.K pension transfers a little clearer, and if you need any further information, please post a question or contact me.
Thanks
Mark
This is a great bit of Info, could you tell me is it true you can draw from your RRSP ot the sum of $25000 for the purpose of a downpayment on a home? and if so would the thieving british government want 55% of that?
cheers Mike
Aug 30th 2009, 11:13 pm
#4
BE Enthusiast
Joined: Feb 2008
Location: British Columbia, Canada
Posts: 428
Re: Pension Transfer - Canada
Hi Mike,
A big advantage of the RRSP is you are able to take out up to $25000 to use as downpayment on your first home in Canada, without triggering any withholding taxes from the Canadian Govt.
However, the five year rule from the U.K would still be in effect if you withdrew from the RRSP for the purpose of using this money as a deposit on a house, and you had not been non resident from the U.K for 5 years or more.
Therefore the U.K could still tax you up to 55% on this withdrawal ! Unfortunately this 5 year rule does not take into account what you you are able to do from the Canadian side of things.
The QROPS scheme in Canada is obliged to inform the HMRC of ANY withdrawals you make from the RRSP if you are within that 5 year period of leaving the U.K
If they failed to report this to the HMRC, this could jeapordize their QROPS status.
Also do not believe anybody if they say this 5 year rule doesnt exist etc etc.
It is there in black and white on the HMRC Website.
It doesnt stop you taking money out of the RRSP before 5 years, but it could mean that you may be hit with the 55% tax charge !!
A big advantage of the RRSP is you are able to take out up to $25000 to use as downpayment on your first home in Canada, without triggering any withholding taxes from the Canadian Govt.
However, the five year rule from the U.K would still be in effect if you withdrew from the RRSP for the purpose of using this money as a deposit on a house, and you had not been non resident from the U.K for 5 years or more.
Therefore the U.K could still tax you up to 55% on this withdrawal ! Unfortunately this 5 year rule does not take into account what you you are able to do from the Canadian side of things.
The QROPS scheme in Canada is obliged to inform the HMRC of ANY withdrawals you make from the RRSP if you are within that 5 year period of leaving the U.K
If they failed to report this to the HMRC, this could jeapordize their QROPS status.
Also do not believe anybody if they say this 5 year rule doesnt exist etc etc.
It is there in black and white on the HMRC Website.
It doesnt stop you taking money out of the RRSP before 5 years, but it could mean that you may be hit with the 55% tax charge !!
Oct 13th 2009, 1:32 am
#5
Just Joined
Joined: Jan 2007
Posts: 3
Re: Pension Transfer - Canada
If anyone needs further advice on this matter send me a pm, as I have experience of transferring the pension.
Oct 13th 2009, 9:29 pm
#6
Lost in BE Cyberspace
Joined: Jul 2006
Location: Cochrane, Alberta
Posts: 7,861
Re: Pension Transfer - Canada
A blank-style username on this forum (and the other you have recently written on
) may not inspire confidence or trust until we know more about you 
I don't mean this to sound rude at all - just an idea ....
