Cross Border Tax Q&A – Canadian with UK Pension

1
214

Question

Dear Sir

This year I am eligible to claim a UK state pension for myself and my wife (as a dependent).

Over the last ten years, I have made voluntary contributions to the UK National Insurance, so as to maintain that eligibility for a pension.

How do I offset the total cost of those contributions made to that foreign pension scheme, so as to limit the amount of Canadian income tax that foreign pension might incur?

Regards
XXXXXX

Answer

Hi XXXXXX

The taxes you pay in Canada on the US pension can be offset by any withholding taxes the UK representative withholds e.g. foreign tax credit. However it’s not going to be possible to get a foreign tax credit for the voluntary payments to the government plan. The only way that would be possible would be if you were a short-term resident of the UK and your paid “social taxes” to the UK and never intended to collect a government pension when you left.

Hope that helps and don’t hesitate to give me a call if you need more clarification.

Regards

Phil Hogan, CA
250-661-9417

Dear Sir

This year I am eligible to claim a UK state pension for myself and my wife (as a dependent).

Over the last ten years, I have made voluntary contributions to the UK National Insurance, so as to maintain that eligibility for a pension.

How do I offset the total cost of those contributions made to that foreign pension scheme, so as to limit the amount of Canadian income tax that foreign pension might incur?

Regards

READ  US Citizen living in Canada going business in Canada and the US

Do you need help from one of our Cross Border Professionals? Contact us here and we'll reach out shortly.

1 COMMENT

  1. Just wanted to let you know that I found the Q&A above useful as it answered one on my question.

    This site is a great resource.

    Thanks

LEAVE A REPLY

Please enter your comment!
Please enter your name here