Hello. I have come across this thread as a result of a search and found it very helpful, but I would like to clarify I have understood it correctly. I also have a couple of questions about reporting income.
1) I am a UK national residing in the UK who worked for 16 years in Canada. As a result I have approximately £50,000 in Canadian pension investments, divided roughly equally between a Registered Retirement Savings Plan (RRSP) and a Locked in Retirement Account (LIRA). Our Canadian advisers have suggested we may want to liquidate both and transfer the cash to invest in the UK; but if I understand this thread correctly, the money would then be subject to BOTH the Canadian 25% withholding tax, AND UK income tax on the whole amount. Is my understanding correct?
2) This would obviously push us into the higher tax band and generate a substantial UK bill, and it is therefore more tax efficient to convert our Canadian assets into income. This would still be subject to the Canadian withholding tax, and I presume the income would then need to be declared annually on my UK self-assessment and taxed accordingly. Is this correct?
3) From the UK point of view is the LIRA (which represents the money from my actual employers' pension plan) regarded any differently to the RRSP (which represents my personal savings).
4) Finally, if I take the lump sum (unlikely but I am asking for the sake of completeness), where do I declare it on my UK self-assessment, and where if anywhere do I enter the amount retained by Canada; and
5) If I take it as retirement income, where do I declare it, and where do I declare the Canadian tax taken off?
There are obviously a lot of us in this sort of situation and I would welcome advice as we plan our retirement.