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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 21093
Experience:  International tax
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I am looking for information on how I deal with my Canadian

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I am looking for information on how I deal with my Canadian RRSP now that I am a UK resident. For information I moved to the UK in 2006 and left my RRSP in Canada. I am now concerned that my assumptions on how this will be taxed when I am ready to draw down on it are incorrect having done some recent research. I need some guidance on what if anything I need to do now. I am still likely 7 years from wanting to start the draw down.
JA: Have you talked to a tax professional about this?
Customer: no.
JA: Anything else you want the Accountant to know before I connect you?
Customer: Not that I am aware of.

Hi, I am one of the experts. I will come back to you little later, plz bear with me.

Customer: replied 7 days ago.
No worries.

Canadian pension, I am opting out because I am not 100% sure about them. One of other experts might help. Good luck.

Customer: replied 7 days ago.
Thanks. Please note this is a Canadian Registered Retirement Savings Plan (personal account) not a company pension.

Where a UK resident makes a lump sum withdrawal from an RRSP or an RRIF, Canada imposes a 25 per cent withholding tax. No tax credit relief is allowable in the United Kingdom in respect of the tax withheld, however, because the Canadian tax is imposed upon the lump sum withdrawal (which does not itself give rise to a tax charge in the United Kingdom), whereas any UK tax charge is on the disposal of assets held within the Plan or Fund to enable the lump sum to be withdrawn (and no tax is levied on the disposal of fund assets in Canada). The Elimination of Double Taxation Article (Article 21) obliges the United Kingdom to give credit for Canadian tax paid only against UK tax computed by reference to the same profits, income or chargeable gains by reference to which the Canadian tax is computed. Since no UK tax is computed by reference to the subject of Canadian tax (that is, the withdrawal), no tax credit relief is allowable. Similarly, where the disposal of fund assets to facilitate a withdrawal gives rise to a UK tax charge, no tax credit relief is allowable since the disposal does not attract a tax charge in Canada.

Customer: replied 7 days ago.
Thanks. I was able to locate the above information on the HMRC site. Perhaps my question was not clear. I understand that I will Be taxed on any lump sum withdrawal by Canada at 25%. The same information also suggests that the assets within the plan are not recognised as tax shelters by the UK and that when I dispose of the assets I would have to pay capital gains tax on the any gains. Is that correct? If so I would these gains be calculated and from what point in time? When I left Canada or from when the assets were purchased. The assets in the plan originated from a number of sources and have been consolidate and move between advisors as a result I have no historic cost information from any prior to these being moved to a new provider in 2016.

You are not taxed on capital gains in the UK nor Canada on this fund

TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 21093
Experience: International tax
TaxRobin and other Tax Specialists are ready to help you

You are only taxed in Canada on distributions

It may have been better of they had said that and then said" do not ask for any tax credit in the UK"

Customer: replied 7 days ago.
Agreed. One supplementary question. If and when I withdraw any amounts from this whether a portion or all of it do do I need to report it on my UK tax return? And if I do there is no tax implications for me in the UK? If this is correct then I could in theory withdrawal all or a portion of the balance pay 25% tax on any amount and move it to the UK. The only considerations would be lost growth opportunities, FX rates etc. Is my thinking correct?Final question. Does this plan affect my UK lifetime allowance of £1 million?Thanks,

No tax in the UK

Yes loss of growth

You are most welcome.
A 5 star positive rating would be appreciated

Customer: replied 7 days ago.
Thanks. Can you confirm that this does not impact my £1 million life time allowance for a UK pension?

I have to check on that one sec.................

Does not effect the lifetime allowance (which for for most people is £1,055,000 now)

Customer: replied 7 days ago.
Thanks!

You are most welcome.

Customer: replied 6 days ago.
Following up on this discussion can you confirm where on the self assessment return for the UK this income would be included? Is this considered foreign income or pension income? Does it even need to be declared, I would think yes. Also how do I ensure I am not taxed in the UK if I add this? I was playing around with my current self assessment but could not see how to declare it but not be taxed again. Thanks
Customer: replied 6 days ago.
Hi Robin did you see my question from earlier today?

No you do not declare

Customer: replied 6 days ago.
OK.