# RSP/RIF - how is it taxed in the UK



## DJC_100 (12 mo ago)

I have a Canadian RSP/RIF and will be moving back to the UK soon. I know the RSP/RIF must stay in Canada and cannot be transferred to the UK
I have been researching how the UK will tax this asset. I understand the is no Canadian withholding tax on periodic payments paid out to me and also, there is no UK tax on this income. BUT I know the UK will tax investment growth on securities owned within the RSP.?RIF
So my question -- is the UK tax liability based on the RSP portfolios total increase in market value over the course of the year OR does the tax apply only to the gain on those investments sold within the RSP/RIF to generate 'cash' to facilitate the periodic payment? I assume this would be taxed as a capital gain? (which is good as I know there is a cap gain exemption each year) I also assume I could sell a stock position that's flat or even at a loss and pay zero tax.
Does anyone have any experience in this area? 
Cheers


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## 255 (Sep 8, 2018)

@DJC_100 -- The last time I was in the UK was 1965, but since nobody has answered, I'll give it a try. First, as I'm sure you know the Tax Treaty between Canada and the UK is the governing document: Convention Between the Government of Canada and the Government of the United Kingdom of Great Britain and Northern Ireland - Canada.ca . Specifically, Article 17 handles pensions.

Your statement: "BUT I know the UK will tax investment growth on securities owned within the RSP.?" How do you know? My reading only shows tax on withdrawals: DT4610 - Double Taxation Relief Manual - HMRC internal manual - GOV.UK . Of course you may be right -- I haven't been to Canada since about 2000 either.

Just another reference: https://www.canada.ca/content/dam/cra-arc/formspubs/pub/t4040/t4040-21e.pdf . Cheers, 255


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## DJC_100 (12 mo ago)

Thanks @ 255
If you read a little further in the DTA it says the income earned within the RSP/RIF is taxed when there are 'disposals' to generate cash needed fort he annual withdrawal. The annual withdrawal amount is not recognized as income by the UK -- the income created within the RSP/RIF needed to actual facilitate the payment.


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## Dunedin (Aug 12, 2013)

Article 17 of the UK Canada double tax treaty does not mention the taxation of disposals within a pension arrangement. Where does DJC_100 see this mentioned?


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## DJC_100 (12 mo ago)

Dunedin said:


> Article 17 of the UK Canada double tax treaty does not mention the taxation of disposals within a pension arrangement. Where does DJC_100 see this mentioned?


I read it in the DT4617 section.....here is the section

*DT4617 - Double Taxation Relief Manual: Guidance by country: Canada: Withdrawals from Canadian RRSPs/RRIFs*
Canadian Registered Retirement Savings Plans
(RRSPs) and Registered Retirement Income Funds (RRIFs)
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.


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