Author Topic: Any Canadian expats in here?  (Read 884 times)

daverobev

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Any Canadian expats in here?
« on: August 09, 2018, 03:35:48 PM »
I'm moving back to the UK next year, from Canada.

Anyone here have any experience with doing this? 'Unfortunately' my situation is more complex than when I left, in that I have a family - with investments and all that.

My current concerns/queries are regarding the Canadian RESP - Registered Education Savings Plan.

It is what it sounds like, you put money in, the government puts some more in, and when they go to University or whatever, they can take the money out and growth is taxed in their hands.

What I'm not sure is:

Presuming the growth will be taxed in the UK, in whose hands will it be taxed? The 'subscriber' (parent, in this instance), or the child?

As with everything outside a Canadian RESP or British SIPP or ISA (edit - not sure about the ISA now, seems like it must have UK reporting... which is fine, same with the SIPP; basically anything outside the RRSP must be UK reporting), must I stick to 'UK Reporting' funds? This is hard, as there don't seem to be any good Canadian domiciled ETFs (and AFAIK you can only hold CAD stuff in the RESP).
« Last Edit: August 09, 2018, 03:41:07 PM by daverobev »

Clodagh

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Re: Any Canadian expats in here?
« Reply #1 on: August 10, 2018, 09:07:56 AM »
I am a Canadian expat!  I moved here (to Scotland) 2 years ago exactly.  We have complicated our lives with also being resident in New Zealand for most of our married life but I digress.
I can't comment on RESPs but I am just in the process of trying to bring our RRSPs over here.  It is way more complicated than I thought: first I was told not to do anything until I have been domiciled for a year here and now I've been told if I transfer before 2019 I will be dinged a fairly hefty penalty.

All I can say to your query is check and double-check residency/domiciled regulations with the RESPs and HMRC.

Best of luck!

daverobev

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Re: Any Canadian expats in here?
« Reply #2 on: August 10, 2018, 10:42:47 AM »
I am a Canadian expat!  I moved here (to Scotland) 2 years ago exactly.  We have complicated our lives with also being resident in New Zealand for most of our married life but I digress.
I can't comment on RESPs but I am just in the process of trying to bring our RRSPs over here.  It is way more complicated than I thought: first I was told not to do anything until I have been domiciled for a year here and now I've been told if I transfer before 2019 I will be dinged a fairly hefty penalty.

All I can say to your query is check and double-check residency/domiciled regulations with the RESPs and HMRC.

Best of luck!

Thanks!

You're transferring your RRSP into a SIPP? I just emailed a couple of companies about that today actually, who did you go with (AJ Bell immediately came back with a 'nope'). Where does the penalty come from?

Clodagh

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Re: Any Canadian expats in here?
« Reply #3 on: August 11, 2018, 09:18:36 AM »
I just assumed that any SIPP would accept the RRSPs - never thought they would say no.  Interesting!
I have been looking at Lansdown Hargreaves for SIPPs.  I am in Canada just now on business so as soon as I get back I will give them a ring to make sure they will be okay with it.  I'm going with LH because lots of people seem to use them on this site and I must say that so far they have been really good with customer service.  I quite like their website too.  For everything else (ISAs, general account) I'm with Vanguard.


As for the penalty... I still don't understand any of it.  My September goal is to get it all sorted and to have a company SIPP set up (we own our own company).

Good luck with the move.  It was pretty painless for us apart from the banks.

Rightflyer

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Re: Any Canadian expats in here?
« Reply #4 on: August 12, 2018, 08:59:14 AM »
Yes. Just made the move last year.

For us, the best way to get our RRSP money over here is to convert to RRIF.
It is then seen as a pension and subject to certain limits, not subject to withholding tax in Canada.
It will be taxed at your nominal rate here but you can contribute up to 100% of your income to your SIPP and  effectively get your tax back.

TFSA's are invisible to HMRC so you will get taxed on those capital gains and income.

If you have any more detailed questions, fire away.


daverobev

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Re: Any Canadian expats in here?
« Reply #5 on: August 12, 2018, 09:48:46 AM »
Yes. Just made the move last year.

For us, the best way to get our RRSP money over here is to convert to RRIF.
It is then seen as a pension and subject to certain limits, not subject to withholding tax in Canada.
It will be taxed at your nominal rate here but you can contribute up to 100% of your income to your SIPP and  effectively get your tax back.

TFSA's are invisible to HMRC so you will get taxed on those capital gains and income.

If you have any more detailed questions, fire away.

Thanks, yes I know about the RRIF 'hack' - I'll might be doing that in a few years once I've squirrelled away my unregistered money into an ISA. But, I did wonder if it was simpler/possible to just transfer into a SIPP and be done with it.

TFSAs are not tax shelters no, and you shouldn't hold non UK reporting stuff in else you don't get the benefit of divis and gains being taxed as such, rather they are taxed as income.

Any ideas on the RRIFs? I think the same is true - I'll just have to get rid of my nice global portfolio and settle for a few blue chip Canadian stocks. Either that, or just collapse the whole thing, pay the penalty, and put the money into a Junior ISA.

I'm of two (three?) minds about the TFSA - either, temporarily, switch the global ETFs for individual stocks; or, I could switch to things that ARE UK reporting, namely, Vanguard's US domiciled ETFs (= loss of withholding, but in theory I can claim that back?); or, just withdraw everything, and invest in UK ETFs like VWRL or whatever.

I guess simplicity trumps all. To begin with I'll be ok because I'll only be in the UK for Jan-Feb-Mar of 2018-2019, so I won't earn enough to worry about Self Assessment on dividends and whatnot. I'll probably be under the personal allowance. But for 2019-2020 I won't (though I'll likely live off savings and funnel as much as I can of my earnings into a SIPP).

daverobev

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Re: Any Canadian expats in here?
« Reply #6 on: August 13, 2018, 08:57:14 AM »
I just assumed that any SIPP would accept the RRSPs - never thought they would say no.  Interesting!
I have been looking at Lansdown Hargreaves for SIPPs.  I am in Canada just now on business so as soon as I get back I will give them a ring to make sure they will be okay with it.  I'm going with LH because lots of people seem to use them on this site and I must say that so far they have been really good with customer service.  I quite like their website too.  For everything else (ISAs, general account) I'm with Vanguard.


As for the penalty... I still don't understand any of it.  My September goal is to get it all sorted and to have a company SIPP set up (we own our own company).

Good luck with the move.  It was pretty painless for us apart from the banks.

I got a response back from HL this morning - no, they won't do it, but they'd be happy to take my business AFTER having transferred to a SIPP. Yeah. Thanks.

daverobev

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Re: Any Canadian expats in here?
« Reply #7 on: August 13, 2018, 09:10:07 AM »
So far:

AJ Bell - no

HL - no

iWeb I won't bother as they use AJ Bell for the SIPP, for some reason

Just emailed:

Barclays

Fidelity

Can't find email for:

Aviva

Fingers crossed I can find someone.. I'd rather just have it done, than have to faff with RRIFs at this point.

Rightflyer

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Re: Any Canadian expats in here?
« Reply #8 on: August 13, 2018, 10:49:55 AM »
Yes. Just made the move last year.

For us, the best way to get our RRSP money over here is to convert to RRIF.
It is then seen as a pension and subject to certain limits, not subject to withholding tax in Canada.
It will be taxed at your nominal rate here but you can contribute up to 100% of your income to your SIPP and  effectively get your tax back.

TFSA's are invisible to HMRC so you will get taxed on those capital gains and income.

If you have any more detailed questions, fire away.

Thanks, yes I know about the RRIF 'hack' - I'll might be doing that in a few years once I've squirrelled away my unregistered money into an ISA. But, I did wonder if it was simpler/possible to just transfer into a SIPP and be done with it.

TFSAs are not tax shelters no, and you shouldn't hold non UK reporting stuff in else you don't get the benefit of divis and gains being taxed as such, rather they are taxed as income.

Any ideas on the RRIFs? I think the same is true - I'll just have to get rid of my nice global portfolio and settle for a few blue chip Canadian stocks. Either that, or just collapse the whole thing, pay the penalty, and put the money into a Junior ISA.

I'm of two (three?) minds about the TFSA - either, temporarily, switch the global ETFs for individual stocks; or, I could switch to things that ARE UK reporting, namely, Vanguard's US domiciled ETFs (= loss of withholding, but in theory I can claim that back?); or, just withdraw everything, and invest in UK ETFs like VWRL or whatever.

I guess simplicity trumps all. To begin with I'll be ok because I'll only be in the UK for Jan-Feb-Mar of 2018-2019, so I won't earn enough to worry about Self Assessment on dividends and whatnot. I'll probably be under the personal allowance. But for 2019-2020 I won't (though I'll likely live off savings and funnel as much as I can of my earnings into a SIPP).

RRIFs are seen by HMRC as a pension wrapper so you don't need to worry about those. You'll only need to pay tax in the UK on the income as it's withdrawn.

Re: TFSAs. Given the very advantageous exchange rate, you'd be smart to sell everything in the TFSAs and move the money to GBP soonish. As soon as you get here, open an ISA and stuff away. Between you and SO (if there is an SO) you'll have 80,000 quid of ISA room to put away by next April.

We're just finishing up withdrawing all of our TFSA money and moving it now. (GBP/CAD is down over 7% since March.)

You could always buy some GBP now and then take a flyer on whether we crash out of EU or not.





daverobev

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Re: Any Canadian expats in here?
« Reply #9 on: August 13, 2018, 12:03:27 PM »
Yes. Just made the move last year.

For us, the best way to get our RRSP money over here is to convert to RRIF.
It is then seen as a pension and subject to certain limits, not subject to withholding tax in Canada.
It will be taxed at your nominal rate here but you can contribute up to 100% of your income to your SIPP and  effectively get your tax back.

TFSA's are invisible to HMRC so you will get taxed on those capital gains and income.

If you have any more detailed questions, fire away.

Thanks, yes I know about the RRIF 'hack' - I'll might be doing that in a few years once I've squirrelled away my unregistered money into an ISA. But, I did wonder if it was simpler/possible to just transfer into a SIPP and be done with it.

TFSAs are not tax shelters no, and you shouldn't hold non UK reporting stuff in else you don't get the benefit of divis and gains being taxed as such, rather they are taxed as income.

Any ideas on the RRIFs? I think the same is true - I'll just have to get rid of my nice global portfolio and settle for a few blue chip Canadian stocks. Either that, or just collapse the whole thing, pay the penalty, and put the money into a Junior ISA.

I'm of two (three?) minds about the TFSA - either, temporarily, switch the global ETFs for individual stocks; or, I could switch to things that ARE UK reporting, namely, Vanguard's US domiciled ETFs (= loss of withholding, but in theory I can claim that back?); or, just withdraw everything, and invest in UK ETFs like VWRL or whatever.

I guess simplicity trumps all. To begin with I'll be ok because I'll only be in the UK for Jan-Feb-Mar of 2018-2019, so I won't earn enough to worry about Self Assessment on dividends and whatnot. I'll probably be under the personal allowance. But for 2019-2020 I won't (though I'll likely live off savings and funnel as much as I can of my earnings into a SIPP).

RRIFs are seen by HMRC as a pension wrapper so you don't need to worry about those. You'll only need to pay tax in the UK on the income as it's withdrawn.

Re: TFSAs. Given the very advantageous exchange rate, you'd be smart to sell everything in the TFSAs and move the money to GBP soonish. As soon as you get here, open an ISA and stuff away. Between you and SO (if there is an SO) you'll have 80,000 quid of ISA room to put away by next April.

We're just finishing up withdrawing all of our TFSA money and moving it now. (GBP/CAD is down over 7% since March.)

You could always buy some GBP now and then take a flyer on whether we crash out of EU or not.

Ah, but the exchange rate is irrelevant to me - I'd be selling an EAFE fund, which is what I'd like to rebuy (though I can't find one, so it'll probably end up being a combination of VEUR and some Asia Pacific ETF, when I find one).

Alas, my wife won't be over til the middle of next year or later, and she has her own stuff to put in an ISA. What I am hoping to do is get my employer to push most of my salary, with salary sacrifice, into a SIPP, and live off savings.

I already had to sell a load of stuff to get the Family Visa 'proof we won't sponge off the state' amount, so... Yeah, maybe not such terrible timing IF the market keeps going down. Except the pound, as you say, keeps falling. Oh well.

daverobev

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Re: Any Canadian expats in here?
« Reply #10 on: September 01, 2018, 08:00:32 PM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

Goldielocks

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Re: Any Canadian expats in here?
« Reply #11 on: September 01, 2018, 10:34:54 PM »
On another comment -- Canadians living abroad / non resident.... if you have 20 years of residency in canada (or canada + another tax treaty country like NZ, UK USA, AUS, etc), you can get your Old Age Security Cheques mailed to you overseas.   


Rightflyer

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Re: Any Canadian expats in here?
« Reply #12 on: September 02, 2018, 09:04:12 AM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

My knowledge is based on our accountant in Canada. Their advice was that RRSP/LIRA and RRIF's were considered pensions and not taxed in the wrapper, but that TFSAs were transparent.

Do you have some definitive official sources?
 

« Last Edit: September 02, 2018, 09:28:09 AM by Rightflyer »

daverobev

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Re: Any Canadian expats in here?
« Reply #13 on: September 02, 2018, 09:19:39 AM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

My knowledge is based on our account in Canada. The advice was that RRSP/LIRA and RRIF's were considered pensions and not taxed in the wrapper, but that TFSAs were transparent.

Do you have some definitive official sources?

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4617

"...whereas any UK tax charge is on the disposal of assets held within the Plan or Fund..." - this page is specifically about RRSPs and RRIFs.

https://britishexpats.com/forum/moving-back-uk-61/rrsps-cdn-uk-tax-treatment-749574-print/

Basically it's a PITA - any gains INSIDE the RRSP/RRIF are taxable by the UK (as cap gains and divis ONLY if they are UK-reporting funds, otherwise as income), but Canada doesn't tax; when you withdraw, the UK doesn't tax (you've already paid tax on gains), but Canada does - so no double taxation relief is available.

Edit - and also, any pension payment is taxed in the UK at an inclusion rate of 90% (so if you get $10k, you report $9k).

So, what I guess I'll do is wait until I'm under the UK personal allowance to convert to an RRIF. You can currently put 2800 or so GBP (=3600 after top up from government) into a SIPP even if you aren't working; if I take whatever amount from my RRSP->RRIF, it'll be only a couple of thousand dollars a year (ah.. it's complicated... I have two, one of which is a normal RRSP, the other I - in hindsight foolishly - transferred to Canada via QROPS when it was available - which I can't take out of until 10 years after the transfer, else the UK taxes it at a nasty rate - so that'll have to sit a while).

Or I guess I could start taking it immediately but put it into my SIPP.

So then, assuming I'm a basic rate tax payer (I will be), I'll take $2k a year, pay tax on $1800 at 20% = $360, leaving $1440 + $200. That goes into the SIPP and gets the government giving me back 25% = $2050

If I wait til I stop working/am under the personal allowance, I'll take $2k a year, pay no tax, and put it into a SIPP -> $2500. I guess it's worth waiting. I'm probably only going to work a significant amount a few years at most (and will be shoving as much as I can into a SIPP during this time!).

I just have to be careful with capital gains. There is an allowance of 11,700 pounds a year. Before I leave the for the UK I need to reset all my accounts (inc. the RRSPs) - it doesn't matter to Canada because I'll be paying the 'exit tax' on unreg, and anything in an RRSP is not taxable.

Each year I'll be selling a bit in the RRSP, and a bit of unreg, to move into an ISA.

There is just so much arsing about to keep the tax owing low.
« Last Edit: September 02, 2018, 09:37:01 AM by daverobev »

Rightflyer

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Re: Any Canadian expats in here?
« Reply #14 on: September 02, 2018, 09:36:04 AM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

My knowledge is based on our account in Canada. The advice was that RRSP/LIRA and RRIF's were considered pensions and not taxed in the wrapper, but that TFSAs were transparent.

Do you have some definitive official sources?

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4617

"...whereas any UK tax charge is on the disposal of assets held within the Plan or Fund..." - this page is specifically about RRSPs and RRIFs.

https://britishexpats.com/forum/moving-back-uk-61/rrsps-cdn-uk-tax-treatment-749574-print/

Basically it's a PITA - any gains INSIDE the RRSP/RRIF are taxable by the UK (as cap gains and divis ONLY if they are UK-reporting funds, otherwise as income), but Canada doesn't tax; when you withdraw, the UK doesn't tax (you've already paid tax on gains), but Canada does - so no double taxation relief is available.

I've seen the DT4617 manual before. It only speaks to withdrawals triggering tax events.

The forum link seems to be about the same issue.

Our accountant's advice was to convert to RRIFs and start withdrawing at the maximum allowed.

HMRC sees the RRIF as pension so DT4617 doesn't apply. You won't pay tax in Canada. You will however pay tax in the UK. But if you put it straight into a SIPP it should nett out to zero tax.

At least that was our plan.... now you have me worried.

 

daverobev

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Re: Any Canadian expats in here?
« Reply #15 on: September 02, 2018, 09:41:55 AM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

My knowledge is based on our account in Canada. The advice was that RRSP/LIRA and RRIF's were considered pensions and not taxed in the wrapper, but that TFSAs were transparent.

Do you have some definitive official sources?

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4617

"...whereas any UK tax charge is on the disposal of assets held within the Plan or Fund..." - this page is specifically about RRSPs and RRIFs.

https://britishexpats.com/forum/moving-back-uk-61/rrsps-cdn-uk-tax-treatment-749574-print/

Basically it's a PITA - any gains INSIDE the RRSP/RRIF are taxable by the UK (as cap gains and divis ONLY if they are UK-reporting funds, otherwise as income), but Canada doesn't tax; when you withdraw, the UK doesn't tax (you've already paid tax on gains), but Canada does - so no double taxation relief is available.

I've seen the DT4617 manual before. It only speaks to withdrawals triggering tax events.

The forum link seems to be about the same issue.

Our accountant's advice was to convert to RRIFs and start withdrawing at the maximum allowed.

HMRC sees the RRIF as pension so DT4617 doesn't apply. You won't pay tax in Canada. You will however pay tax in the UK. But if you put it straight into a SIPP it should nett out to zero tax.

At least that was our plan.... now you have me worried.
 

I edited my reply a bit - I should've added a new one. Anyway.

The title of that DT is Double Taxation Relief Manual: Guidance by country: Canada: Withdrawals from Canadian RRSPs/RRIFs

And yes it says 'lump sum withdrawals' - but "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"

Maybe there is something there - if the sale is to fund not a lump sum but a periodic withdrawal? I don't know. It seems a bit unfair that you pay tax on the gains (capital and dividend), and then again on withdrawal, but that seems to be the case.

daverobev

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Re: Any Canadian expats in here?
« Reply #16 on: September 02, 2018, 09:52:11 AM »
https://www.telegraph.co.uk/finance/personalfinance/expat-money/10116465/Ask-the-experts-must-we-pay-UK-tax-on-our-Canada-pension-pot.html

This appears to be wrong - so much for the 'expert'. I don't know. I'd way rather have the RRSPs seen as a tax shelter, and just pay tax to the UK as income on withdrawal, than this... buggering about. Though, I think, it'll still work out better.

1 - pay tax on cap gains (0, because nothing sold) and divis (allowance of 2k GBP a year, then 7.5% above that) while inside an RRSP/RRIF

2 - spend a few years filling my ISA, at least until dividends are below the 2k GBP allowance or I stop working

3 - convert to RRIF in a few years when income is below the personal allowance, and take twice the minimum or 10% (I think you can), and put some or all of that back into a SIPP - no tax to Canada, no tax to UK because I'm below the personal amount

So.. it isn't much worse, just more complex.

Rightflyer

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Re: Any Canadian expats in here?
« Reply #17 on: September 02, 2018, 10:13:13 AM »
@Rightflyer I've been reading up, and it seems that RRSPs and RRIFs are NOT seen as tax shelters by the UK.

Please correct me if I'm wrong, I'd love to be, but...

So - in addition to cleaning out the TFSA, seems like I need to make sure everything in my RRSP is also UK reporting (which, thank god, Vanguard's US ETFs are - at least the ones I care about, VXUS etc).

My knowledge is based on our account in Canada. The advice was that RRSP/LIRA and RRIF's were considered pensions and not taxed in the wrapper, but that TFSAs were transparent.

Do you have some definitive official sources?

https://www.gov.uk/hmrc-internal-manuals/double-taxation-relief/dt4617

"...whereas any UK tax charge is on the disposal of assets held within the Plan or Fund..." - this page is specifically about RRSPs and RRIFs.

https://britishexpats.com/forum/moving-back-uk-61/rrsps-cdn-uk-tax-treatment-749574-print/

Basically it's a PITA - any gains INSIDE the RRSP/RRIF are taxable by the UK (as cap gains and divis ONLY if they are UK-reporting funds, otherwise as income), but Canada doesn't tax; when you withdraw, the UK doesn't tax (you've already paid tax on gains), but Canada does - so no double taxation relief is available.

Edit - and also, any pension payment is taxed in the UK at an inclusion rate of 90% (so if you get $10k, you report $9k).

So, what I guess I'll do is wait until I'm under the UK personal allowance to convert to an RRIF. You can currently put 2800 or so GBP (=3600 after top up from government) into a SIPP even if you aren't working; if I take whatever amount from my RRSP->RRIF, it'll be only a couple of thousand dollars a year (ah.. it's complicated... I have two, one of which is a normal RRSP, the other I - in hindsight foolishly - transferred to Canada via QROPS when it was available - which I can't take out of until 10 years after the transfer, else the UK taxes it at a nasty rate - so that'll have to sit a while).

Or I guess I could start taking it immediately but put it into my SIPP.

So then, assuming I'm a basic rate tax payer (I will be), I'll take $2k a year, pay tax on $1800 at 20% = $360, leaving $1440 + $200. That goes into the SIPP and gets the government giving me back 25% = $2050

If I wait til I stop working/am under the personal allowance, I'll take $2k a year, pay no tax, and put it into a SIPP -> $2500. I guess it's worth waiting. I'm probably only going to work a significant amount a few years at most (and will be shoving as much as I can into a SIPP during this time!).

I just have to be careful with capital gains. There is an allowance of 11,700 pounds a year. Before I leave the for the UK I need to reset all my accounts (inc. the RRSPs) - it doesn't matter to Canada because I'll be paying the 'exit tax' on unreg, and anything in an RRSP is not taxable.

Each year I'll be selling a bit in the RRSP, and a bit of unreg, to move into an ISA.

There is just so much arsing about to keep the tax owing low.

Yes, you can put in up to 2880 and they top you up to 3600.
We did this last tax year and again this year.

It is a nice return on your money.

I did a spreadsheet last year, before we moved, to plan out the withdrawals from the RRIF and the contributions to the SIPP.

« Last Edit: September 02, 2018, 10:44:25 AM by Rightflyer »

Rightflyer

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Re: Any Canadian expats in here?
« Reply #18 on: September 03, 2018, 02:25:34 AM »
https://www.telegraph.co.uk/finance/personalfinance/expat-money/10116465/Ask-the-experts-must-we-pay-UK-tax-on-our-Canada-pension-pot.html

This appears to be wrong - so much for the 'expert'. I don't know. I'd way rather have the RRSPs seen as a tax shelter, and just pay tax to the UK as income on withdrawal, than this... buggering about. Though, I think, it'll still work out better.

1 - pay tax on cap gains (0, because nothing sold) and divis (allowance of 2k GBP a year, then 7.5% above that) while inside an RRSP/RRIF

2 - spend a few years filling my ISA, at least until dividends are below the 2k GBP allowance or I stop working

3 - convert to RRIF in a few years when income is below the personal allowance, and take twice the minimum or 10% (I think you can), and put some or all of that back into a SIPP - no tax to Canada, no tax to UK because I'm below the personal amount

So.. it isn't much worse, just more complex.

Sounds like the way to do it.

Yes, I did our spreadsheet based on 10% withdrawals up to age 70. At that point 2 X Minimum is the larger amount. (Lots of variables so everyone's situation will be different.)

Even if the RRIF is transparent (of which I am very unsure right now...) the tax exempted amounts add up.

Personal Allowance - 11,850
Capital Gains Allowance - 11,700
Dividends Allowance - 2,000
Personal Savings Allowance -1,000

Total 26,550 which is over $45,000 CAD.

Assuming a couple (>50K income), that is more than enough to live well over here, even if you are renting.

Any excess above your living requirements can go straight into a SIPP.

Of course we haven't even started on how to deal with the Missus' LIRA...






 

daverobev

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Re: Any Canadian expats in here?
« Reply #19 on: September 03, 2018, 06:43:58 AM »
Drives you crazy, eh? It should be so so much simpler than this - I'd happily convert the RRSPs into a SIPP just to be done with it.

I'm going back for work, and so I'll be doing Salary Sacrifice and shoving big chunks into a SIPP and getting a nice amount more than the standard extra, but that means I won't have much SIPP room... well, maybe. Not sure. I worked on a spreadsheet yesterday and it's all good. It is just about trying to get things straight before leaving Canada to minimise tax as much as I can. Such a pain.

Another thing I didn't realise is that the Personal Allowance in Canada is pro-rated. AFAIK, in the UK it is not. So my decision to move at the start of January doesn't save me anything. I'm assuming I can't claim tax paid to Canada vs tax paid to the UK because the periods of residency don't overlap. Mind you, because the UK doesn't pro-rate (in fact, if you're British, you get the personal allowance regardless of residency - I know that from doing self assessment because of a rental property...), I won't be paying any tax to the UK for 2018-2019 anyway so it's moot.

Rightflyer

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Re: Any Canadian expats in here?
« Reply #20 on: September 03, 2018, 07:03:48 AM »
Drives you crazy, eh? It should be so so much simpler than this - I'd happily convert the RRSPs into a SIPP just to be done with it.

I'm going back for work, and so I'll be doing Salary Sacrifice and shoving big chunks into a SIPP and getting a nice amount more than the standard extra, but that means I won't have much SIPP room... well, maybe. Not sure. I worked on a spreadsheet yesterday and it's all good. It is just about trying to get things straight before leaving Canada to minimise tax as much as I can. Such a pain.

Another thing I didn't realise is that the Personal Allowance in Canada is pro-rated. AFAIK, in the UK it is not. So my decision to move at the start of January doesn't save me anything. I'm assuming I can't claim tax paid to Canada vs tax paid to the UK because the periods of residency don't overlap. Mind you, because the UK doesn't pro-rate (in fact, if you're British, you get the personal allowance regardless of residency - I know that from doing self assessment because of a rental property...), I won't be paying any tax to the UK for 2018-2019 anyway so it's moot.

Ah yes. the departure tax.@#$%!

We started planning that about 18 months before we left.

Liquidating some assets and paying down the (small) mortgage reduced some of the tax burden but they still get you on lots of little things.
That honestly was the biggest pain and seems to be almost punitive...
The good news is that we were very conservative and after a review by the tax man, we got a refund!


daverobev

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Re: Any Canadian expats in here?
« Reply #21 on: September 03, 2018, 09:53:36 AM »
Am I right in saying I don't need to do anything *on departure*, rather just file the year's tax return with extra forms, based on the date I left? I know I need to update addresses everywhere.

Rightflyer

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Re: Any Canadian expats in here?
« Reply #22 on: September 04, 2018, 02:41:45 AM »
Am I right in saying I don't need to do anything *on departure*, rather just file the year's tax return with extra forms, based on the date I left? I know I need to update addresses everywhere.

Yes, you're not an expat until you officially become a resident of the UK.
The definition of resident is pretty tightly defined by HMRC.

Ours was a little complicated by the fact we own a small business (CCPC) so we had to declare an interim year-end as of the date of our officially becoming non-residents.

A few things you might think about:

-If your Canadian passport is due to expire in a year or less, get it done at home... it's expensive to do it from overseas.

-Get a UK account open before you leave... we used HSBC. We had UK banking and credit cards before we arrived. Makes life a lot nicer.

-Using HSBC also simplified bring money across.
If you bring over $100K at a time they are within approx. 1% of the interbank rate.
At $50K they are at about 1.5%... that's as good as any of the currency brokers offer plus no international transfer fees.

-Get a Canadian address to send your mail to (i.e. relative or friend). Leave them a Canada Post Gift card and a box of letter size envelopes.
Once you know your address send them preprinted address labels and have them send your mail every month. Trust me it will simplify your life.

-If you are going to be renting, make a portfolio of rental referrals. As homeowners we didn't really have much but we did get some letters from our home insurance agent etc. I think it really helps as the rental market is quite crowded here.

-Have 6 months of rent cash... it'll get you over the hurdle of not having a rental history AND not having a credit history.

-Get a referral letter from your car insurance company/agent showing years of claim free coverage. It'll reduce your insurance immensely.

-Sign up on a cash back site when you arrive. You'll be buying a lot of shit to get going and you'll get 3-5% on most stuff plus some pretty nice cashback on Internet/Phone/Utilities etc. (We use TopCashBack... if you do use them, let me know if you want a referral code)

-Rent a car for a month or two. It'll take the pressure off of buying a car.
But call from Canada... it can be very expensive renting here. You might get a better deal from Canada.

 There's probably more but I need to take the dog out for walk, in the rain... (oh yeah, don't forget your plastic mac and bring a brolly! Your going to need them in January)

Clodagh

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Re: Any Canadian expats in here?
« Reply #23 on: September 04, 2018, 04:58:40 AM »
What Rightflyer said... :)

A couple of things to add:
Having a bank account is huge.  You don't really belong here until you have one and setting it up even before you leave is really good advice.

I recall that when I went to change my Canadian driving licence over to a British one Canadians were only allowed to drive automatic cars if they couldn't prove they had passed their original Cnd test using a manual car.  (Not the case for Americans which I thought was pretty weird).  It might pay to check if this is still the case as manual cars prevail here. 

Keep your Canadian credit card for emergencies.  After two years living here (and a British husband) we still only have 2000 limit on our British c/c.  As we try and purchase everything on the credit card and pay it off each month I found that very low.  It was good to have the Cnd one as back up when we first got here given the costs of the move.

Having a friend's address to use is a really good idea - you will need to fill out forms online for Canada for various reasons from time to time and a lot of these auto-fill forms don't recognise British addresses.

Best of luck!

Rightflyer

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Re: Any Canadian expats in here?
« Reply #24 on: September 04, 2018, 05:16:30 AM »
What Rightflyer said... :)

A couple of things to add:
Having a bank account is huge.  You don't really belong here until you have one and setting it up even before you leave is really good advice.

I recall that when I went to change my Canadian driving licence over to a British one Canadians were only allowed to drive automatic cars if they couldn't prove they had passed their original Cnd test using a manual car.  (Not the case for Americans which I thought was pretty weird).  It might pay to check if this is still the case as manual cars prevail here. 

Keep your Canadian credit card for emergencies.  After two years living here (and a British husband) we still only have 2000 limit on our British c/c.  As we try and purchase everything on the credit card and pay it off each month I found that very low.  It was good to have the Cnd one as back up when we first got here given the costs of the move.

Having a friend's address to use is a really good idea - you will need to fill out forms online for Canada for various reasons from time to time and a lot of these auto-fill forms don't recognise British addresses.

Best of luck!
Hey Clodagh.

Yep.
Still the same deal with the auto transmission restriction.

I also had an M licence (Ontario) that I got in 1980. I wasn't aware of any automatic transmission bikes back then and I certainly didn't take my test on one. I appealed to common sense but the civil servants on both sides of the pond refused to see it so... I now have a UK "A" licence with an auto transmission limitation??!

daverobev

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Re: Any Canadian expats in here?
« Reply #25 on: September 04, 2018, 05:32:57 AM »
Am I right in saying I don't need to do anything *on departure*, rather just file the year's tax return with extra forms, based on the date I left? I know I need to update addresses everywhere.

Yes, you're not an expat until you officially become a resident of the UK.
The definition of resident is pretty tightly defined by HMRC.

Ours was a little complicated by the fact we own a small business (CCPC) so we had to declare an interim year-end as of the date of our officially becoming non-residents.

A few things you might think about:

-If your Canadian passport is due to expire in a year or less, get it done at home... it's expensive to do it from overseas.

-Get a UK account open before you leave... we used HSBC. We had UK banking and credit cards before we arrived. Makes life a lot nicer.

-Using HSBC also simplified bring money across.
If you bring over $100K at a time they are within approx. 1% of the interbank rate.
At $50K they are at about 1.5%... that's as good as any of the currency brokers offer plus no international transfer fees.

-Get a Canadian address to send your mail to (i.e. relative or friend). Leave them a Canada Post Gift card and a box of letter size envelopes.
Once you know your address send them preprinted address labels and have them send your mail every month. Trust me it will simplify your life.

-If you are going to be renting, make a portfolio of rental referrals. As homeowners we didn't really have much but we did get some letters from our home insurance agent etc. I think it really helps as the rental market is quite crowded here.

-Have 6 months of rent cash... it'll get you over the hurdle of not having a rental history AND not having a credit history.

-Get a referral letter from your car insurance company/agent showing years of claim free coverage. It'll reduce your insurance immensely.

-Sign up on a cash back site when you arrive. You'll be buying a lot of shit to get going and you'll get 3-5% on most stuff plus some pretty nice cashback on Internet/Phone/Utilities etc. (We use TopCashBack... if you do use them, let me know if you want a referral code)

-Rent a car for a month or two. It'll take the pressure off of buying a car.
But call from Canada... it can be very expensive renting here. You might get a better deal from Canada.

 There's probably more but I need to take the dog out for walk, in the rain... (oh yeah, don't forget your plastic mac and bring a brolly! Your going to need them in January)

Ah, I'm British, so most of that is ok. I still have my old current account. I have an Interactive Brokers account so forex is at spot. My original driving license is British, and I've checked that the DVLA will be able to reconnect to my old one. We'll see. I'll certainly put a note in when I do the switch!

The rental stuff is hard, but my boss has agreed to be guarantor. We'll see how that pans out - I'll be over in November for a couple of weeks to sort that out. Letter from the insurance co, that's a good thought. I might see if I can get a reference from where we lived before buying here.. Hmm.

I'll be UK resident immediately. That's how I'm playing it; see 1.23 here https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html and under the SRTs, because I'll be working in the UK 'continuously' it... sort've backdates, tax wise, to when you arrived.

Because we're doing split movement I can keep some stuff with the current address. Just me moving in January. Though, I want to get as much switched over as possible, and whatever doesn't deal with non-residents shut down (Simplii... whyyyy).