UK / Canada tax and financial advisor
Mar 28th 2024, 11:00 am
#16
BE Enthusiast
Joined: Nov 2004
Location: Looe, Cornwall
Posts: 674
Re: UK / Canada tax and financial advisor
You will receive your pension without Canadian tax taken. They will ask for proof of non residency for all income in Canada. The CRA will provide you with the letter. You will have to declare it once back in the UK for UK tax purposes.
Mar 28th 2024, 11:03 am
#17
BE Enthusiast
Joined: Nov 2004
Location: Looe, Cornwall
Posts: 674
Re: UK / Canada tax and financial advisor
I will be anxiously checking in for an answer re RRIF...as we plan to retire in Belfast Northern Ireland from Canada down the road. I have been trying to find out if we have to claim our monthly income from RRSPs (or RRIF), CPP and OAS in a UK tax return, or if we can just claim in a Canadian income tax return. I did contact an accountant in Belfast to ask 3 questions related to this and they wanted 7,000 pounds to answer those questions. I was in a bit of shock at that, but trying to find this answer has been tough. I would love to be able to just claim on a Canadian tax return and then just bring money over when needed and if I can do that, how much can we bring without being taxed in the UK.
Mar 28th 2024, 9:07 pm
#18
Just Joined
Joined: Jan 2024
Posts: 9
Re: UK / Canada tax and financial advisor
Thank you for the detailed replies. Coincidentally we are also heading to Cornwall but only in a few more years when I retire. I know what you mean about the roads. We’ve been over a few times and rented a car and driven the Cornish back roads. It can be quite a white knuckle experience at times. 😬
As far as taxes go, your experience is how I understood things when reading the tax treaties. No tax in Canada and submit self assessment in UK. My company pension will also pay directly to a UK account which is a bonus and with CRA approval should also incur no Canadian tax.
My understanding of RRSP’s is that if you don’t cash it in but instead take periodic payments out then there is no withholding tax (again with CRA approval). It’s not clear what they mean by periodic payments though (amount, time period of payments, etc).
We have opened HSBC UK accounts and have already started moving some money across.
Thank you for offer mor advice via pm. I will most likely pick your brain again as my retirement approaches. 😀
As far as taxes go, your experience is how I understood things when reading the tax treaties. No tax in Canada and submit self assessment in UK. My company pension will also pay directly to a UK account which is a bonus and with CRA approval should also incur no Canadian tax.
My understanding of RRSP’s is that if you don’t cash it in but instead take periodic payments out then there is no withholding tax (again with CRA approval). It’s not clear what they mean by periodic payments though (amount, time period of payments, etc).
We have opened HSBC UK accounts and have already started moving some money across.
Thank you for offer mor advice via pm. I will most likely pick your brain again as my retirement approaches. 😀
We moved back to the UK in July 2021 from BC to Cornwall having lived in BC for 15 years. Firstly check out this site on the CRA web site - https://www.canada.ca/en/revenue-age...ts-canada.html
You will need to fill out the non resident tax form and send it to the CRA and they will decide if you qualify for Canadian tax purposes. This takes some time so do this in advance and use the date you actually leave Canada. They will confirm you no longer have to pay Canadian tax. Inform the UK tax office as soon as you are resident in the UK. You will need to submit a final Canadian tax return for the part of the Canadian tax year. Canadian pensions etc will then be subject to UK tax only. You will have to sign up for UK self assessment if receiving future Canadian income like pensions etc.
My wife has a substantial sum in a Spousal RSP and we have a similar issue if we cash it in and would have to pay 30% withholding tax in Canada but that can be offset against any tax paid in the UK if taken once you arrive in the UK as this would be considered income.
Other issues to think about if not already done so:-
- Transferring regular Canadian income to the UK. We had a HSBC account set up in both countries and used this to transfer Canadian funds. We opened a Canadian $$ account in the UK and they have recently introduced a "Money Card" where you can transfer currencies on line at excellent rates of exchange. The problem now is that HSBC has pulled out of Canada and sold to RBC so not sure this option still exists.
- Transferring large sums. We had considerable funds to transfer to the UK. We exchanged our Canadian funds with HSBC in Canada but were only allowed to move the equivalent ( if I remember correctly) of US $250k using e-transfer between HSBC Canada and UK. This was a pain as it took nearly 2 weeks to transfer all of our funds!
- Make sure your Canadian bank(s) have your UK details especially new mobile number. It's very difficult to change details once in the UK.
- Make sure you take your Canadian driving licenses with you so you can exchange for a UK one. The UK will only issue you with a license for an automatic vehicle. If you still have you old UK ones then just use that to renew when you come back to the UK and you will get a full license.
- Credit history will be a nightmare once back in the UK because basically you won't have any! We had to use cash for most things, house purchase, car, and anything else which requires a credit check. Even though I had my UK pension paid into HSBC UK before we left the UK they would not give me a credit card despite having substantial finds in my account. We even struggled to get a SIM card let alone a phone contract.
- If you have grown up children coming with you and wanting to go to University they will be considered international students for 3 years from the date of their return to the UK. This basically means you will be paying double the UK rate and will not be able to acquire a student loan.
- adjusting to the UK roads! This was a challenge especially as we had moved to Cornwall and took a long time to re-adjust.
- Make sure any Canadian institutions have your UK details e.g mobile number, address etc and especially make sure the CRA have you UK details. You will also need your T4's etc to submit your final Canadian tax return.
- Settle any Canadian bills/debts before you leave. Best to keep Canadian bank accounts open until you no longer need them. You can have money paid directly into a UK Canadian $$ account from Canada. The advantage of this is are the fees charged in Canada if you have them paid in pounds. I have a pension from BC Hydro and they charge $30 every month to have them paid in pounds on top of exchange rates etc.
- Transferring pets to the UK can be very expensive and stressful. I won't go into this now but pm me if you have any pets you will be bringing with you.
- Bringing goods back to the UK including the dreaded 'TOR'. Thats a subject in its own right!
If you have any other questions re returning to the UK please pm me and I will do my best answer them.
You will need to fill out the non resident tax form and send it to the CRA and they will decide if you qualify for Canadian tax purposes. This takes some time so do this in advance and use the date you actually leave Canada. They will confirm you no longer have to pay Canadian tax. Inform the UK tax office as soon as you are resident in the UK. You will need to submit a final Canadian tax return for the part of the Canadian tax year. Canadian pensions etc will then be subject to UK tax only. You will have to sign up for UK self assessment if receiving future Canadian income like pensions etc.
My wife has a substantial sum in a Spousal RSP and we have a similar issue if we cash it in and would have to pay 30% withholding tax in Canada but that can be offset against any tax paid in the UK if taken once you arrive in the UK as this would be considered income.
Other issues to think about if not already done so:-
- Transferring regular Canadian income to the UK. We had a HSBC account set up in both countries and used this to transfer Canadian funds. We opened a Canadian $$ account in the UK and they have recently introduced a "Money Card" where you can transfer currencies on line at excellent rates of exchange. The problem now is that HSBC has pulled out of Canada and sold to RBC so not sure this option still exists.
- Transferring large sums. We had considerable funds to transfer to the UK. We exchanged our Canadian funds with HSBC in Canada but were only allowed to move the equivalent ( if I remember correctly) of US $250k using e-transfer between HSBC Canada and UK. This was a pain as it took nearly 2 weeks to transfer all of our funds!
- Make sure your Canadian bank(s) have your UK details especially new mobile number. It's very difficult to change details once in the UK.
- Make sure you take your Canadian driving licenses with you so you can exchange for a UK one. The UK will only issue you with a license for an automatic vehicle. If you still have you old UK ones then just use that to renew when you come back to the UK and you will get a full license.
- Credit history will be a nightmare once back in the UK because basically you won't have any! We had to use cash for most things, house purchase, car, and anything else which requires a credit check. Even though I had my UK pension paid into HSBC UK before we left the UK they would not give me a credit card despite having substantial finds in my account. We even struggled to get a SIM card let alone a phone contract.
- If you have grown up children coming with you and wanting to go to University they will be considered international students for 3 years from the date of their return to the UK. This basically means you will be paying double the UK rate and will not be able to acquire a student loan.
- adjusting to the UK roads! This was a challenge especially as we had moved to Cornwall and took a long time to re-adjust.
- Make sure any Canadian institutions have your UK details e.g mobile number, address etc and especially make sure the CRA have you UK details. You will also need your T4's etc to submit your final Canadian tax return.
- Settle any Canadian bills/debts before you leave. Best to keep Canadian bank accounts open until you no longer need them. You can have money paid directly into a UK Canadian $$ account from Canada. The advantage of this is are the fees charged in Canada if you have them paid in pounds. I have a pension from BC Hydro and they charge $30 every month to have them paid in pounds on top of exchange rates etc.
- Transferring pets to the UK can be very expensive and stressful. I won't go into this now but pm me if you have any pets you will be bringing with you.
- Bringing goods back to the UK including the dreaded 'TOR'. Thats a subject in its own right!
If you have any other questions re returning to the UK please pm me and I will do my best answer them.
