# Moving an RRSP from Canada as a UK resident



## Stargazer (Jan 10, 2009)

Has anyone done this? We are moving to the UK this summer and I know the UK doesn't see an RRSP as tax deferred. I am trying to think of the best way to move if so as to minimize taxes . I have read that as a resident of the UK, I can take periodic payments from Canada tax free and then just pay tax in the uk?


----------



## BCCanuck (Mar 13, 2012)

I left my RRSP back in Canada until I'm ready to use it. We converted my wife's RRSP into a RRIF and annually withdraw the minimum amount. When you do that there is no with holding tax. Her income is below the tax threshold here so basically the income is tax free. 

If it's cashed in as a lump sum the tax treaty between the UK and Canada splits the tax payable.


----------



## Stargazer (Jan 10, 2009)

BCCanuck said:


> I left my RRSP back in Canada until I'm ready to use it. We converted my wife's RRSP into a RRIF and annually withdraw the minimum amount. When you do that there is no with holding tax. Her income is below the tax threshold here so basically the income is tax free.
> 
> If it's cashed in as a lump sum the tax treaty between the UK and Canada splits the tax payable.


Thanks so much! Yes, I wasn't sure if we could convert to RRIFs before retirement age.

I read that the UK does not recognize the tax deferral on an RRSP. Does that affect you or is it covered by your UK capital gains exemption?


----------



## BCCanuck (Mar 13, 2012)

Our RRSPs are/were with TD and their RRIF withdrawal chart starts at age 55. Once you convert to a RRIF you then must make an annual withdrawal.

The UK does have a tax sheltered scheme called an ISA. This can be either cash or stocks/shares. Currently you can put in £15,240 annually (roughly $28,000) per person. Any interest is tax free. There is a new scheme also starting this year on income splitting but I haven't read the details.

One thing I wished we had done before leaving was to transfer our TD investments to a bank that has business in both countries. We currently use HSBC for private pension & CPP. It's easy to drag & drop money between countries. TD doesn't do personal banking here so RRIF payment comes as a cheque in Can. $ and must pay a small fee to cash.


----------



## Stargazer (Jan 10, 2009)

BCCanuck said:


> Our RRSPs are/were with TD and their RRIF withdrawal chart starts at age 55. Once you convert to a RRIF you then must make an annual withdrawal.
> 
> The UK does have a tax sheltered scheme called an ISA. This can be either cash or stocks/shares. Currently you can put in £15,240 annually (roughly $28,000) per person. Any interest is tax free. There is a new scheme also starting this year on income splitting but I haven't read the details.
> 
> One thing I wished we had done before leaving was to transfer our TD investments to a bank that has business in both countries. We currently use HSBC for private pension & CPP. It's easy to drag & drop money between countries. TD doesn't do personal banking here so RRIF payment comes as a cheque in Can. $ and must pay a small fee to cash.


When the money is released, does the Canadian bank hold any tax back? RBC told me today they would tax the withdrawal and I would have to file a Canadian return to reclaim it. That doesn't sound right.


----------



## BCCanuck (Mar 13, 2012)

When taking the minimum RRIF payout there is no withholding tax. This is per the CRA rules. If you take more then you are subject to taxation.

Having left Canada and no plans to return the CRA deems us as non resident and there is no tax deducted from CPP as well.


----------



## Stargazer (Jan 10, 2009)

BCCanuck said:


> When taking the minimum RRIF payout there is no withholding tax. This is per the CRA rules. If you take more then you are subject to taxation.
> 
> Having left Canada and no plans to return the CRA deems us as non resident and there is no tax deducted from CPP as well.


Great! Yes, my advisor checked and you are right. I can get the payments with no Canadian tax.

Do you get monthly payments or can it come up in a yearly amount?


----------



## BCCanuck (Mar 13, 2012)

I have it automatically deposited to our UK bank every month. It is deposited in GPB (£).

I believe you have to receive 3 cheques before you can apply for direct deposit. Best check with Services Canada.

Service Canada - Canadians Abroad - Service Canada


----------



## Stargazer (Jan 10, 2009)

BCCanuck said:


> I have it automatically deposited to our UK bank every month. It is deposited in GPB (£).
> 
> I believe you have to receive 3 cheques before you can apply for direct deposit. Best check with Services Canada.
> 
> Service Canada - Canadians Abroad - Service Canada


We can't get OAS or CPP yet/ We are in our 40s. Just converting to an RRIF and taking the money early.


----------

