Dear Sirs,
I have visited the Centa web page and it appear that there may be a way for
me to "unlock" a federally controlled RRSP however I would like clarification
and direction as to how this may be achieved.
I worked for the CPR in the late 1980's and thus the locked-in nature of
the pension plan (I was a resident of Saskatchewan at the time). I am now a
resident of Brazil (and have been for 6 years). Is there a way for me to
"unlock" this RRSP? If I have to wait until I am 65 it just means the government
of Canada will get more money due to the 25% non-resident withholding tax.
Please help.
Kind regards,
xxxxxxxxxxx
----------------------------------------------
david
ingram replies:
If you have a real good reason and safe use for the
money, you can unlock a federal pension which was rolled into a locked in
RRSP.
According to the Pension Benefits Standards Act (1985), and its
Regulations, a non-resident is described as a person who has ceased to be a
resident of Canada for at least two calendar years, and has lived outside the
country for at least 184 days for each of these calendar
years.
If a former member of a pension plan meets the above requirements
of section 28.4, the funds from a locked-in RRSP or LIF may be
unlocked.
However, it is up to the plan administrator of your financial
institution to determine whether you meet the requirements of the regulations.
Article IV(2) of the Brazil Canada Income Tax Convention
determines which country you are a tax resident of. Giving the plan
administrator copies of your last two Brazilian tax returns and a copy of
Article IV might be enough to have them release the funds (with a 25% tax
holdback).
If not, you have to write to the CRA at 2204 Walkley Road,
Ottawa, K1A 1A8 for a written opinion from the CRA. Filling in form NR-73
and sending it to them will help.
----------------------------------------
David Ingram wrote:
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Disclaimer: This question has been answered without detailed
information or consultation and is to be regarded only as general
comment. Nothing in this message is or should be construed as advice
in any particular circumstances. No contract exists between the reader and the
author and any and all non-contractual duties are expressly denied. All
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David Ingram gives expert income
tax & immigration help to non-resident Americans & Canadians from
New York to California to Mexico family,
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Phone consultations are $400 for 15
minutes to 50 minutes (professional hour). Please note that GST is added if
product remains in Canada or is to be returned to Canada or a phone consultation
is in Canada.
This is not intended to be definitive but in
general I am quoting $800 to $2,800 for a dual country tax return.
$800 would be one T4 slip one W2 slip one or two
interest slips and you lived in one country only - no self employment or rentals
or capital gains - you did not move into or out of the country in this
year.
$1,000 would be the same with one rental
$1,200 would be the same with one business no
rental
$1,200 would be the minimum with a move in or out
of the country. These are complicated because of the back and forth foreign tax
credits. - The IRS says a foreign tax credit takes 1 hour and 53
minutes.
$1,500 would be the minimum with a rental or two in
the country you do not live in or a rental and a business and foreign tax
credits no move in or out
$1,600 would be for two people with income from two
countries
$2,800 would be all of the above and you moved in
and out of the country.
This is just a guideline for US / Canadian
returns
We will still prepare Canadian only (lives in
Canada, no US connection period) with two or three slips and no capital
gains, etc. for $150.00 up.
With a Rental for $350
A Business for $350 - Rental and business likely
$450
And an American only (lives in the US with no
Canadian income or filing period) with about the same things in the same range
with a little bit more if there is a state return.
Moving in or out of the country or part year
earnings in the US will ALWAYS be $800 and up.
TDF 90-22.1 forms are $50 for the first and $25.00
each after that when part of a tax return.
8891 forms are generally $50.00 to $100.00
each.
18 RRSPs would be $900.00 - (maybe amalgamate a
couple)
Capital gains *sales) are likely $50.00 for
the first and $20.00 each after that.
Just a guideline not etched in
stone.
This from "ask an income trusts tax and immigration expert"
from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily
basis with expatriate tax returns with multi jurisdictional cross and
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