UK National Health and Canadian Pensions for new Canadian

Dear Sir,

My wife and I each have 10 years worth of National
Insurance paid with UK and we are planning to move to
Toronto permanently. What do you recommend we do ie.
continue to pay UK National Insurance or stop paying

What is the pension system in Canada like? What should
we know before we get there? We are both 40 years old
and kind of late in our pension arrangements...

We plan to buy a house in Toronto in the range of
$250,000 with a down payment of %10 to %15. What kind
of salary range would they require for that?

I work for a US cruise company and my salary is
tax-free. Will I have to pay tax once I move to
toronto? I will not be spending more than 4 months a
year for the first 2 years in Toronto.

Thank you kindly for your answers

david ingram replies:

Canada has two government pensions:

The Canada Penison plan covers workers who put in approxiamately 5% of their income up to $40,000 if an employee and 10% of their net income if self employed. One can start withdrawing it at age 60 at the earliest of age 70 at the latest. To get a full penion, one has to contribute at the maximum for 40 years. Therefore, if you put in until age 70, the most you would receive is 75% of the maximum pension.

We also have the Old Age Security pension which one receives for being alive and being a resident of Canada. It can start at age 65 and also requires 40 years ofr esidence in Canada. In your case, you would receive 25/40's of the pension . It also has a means test attached and some of it starts getting claweed back at about $60,000 of income and it disappears entirely at about $85,000 of income in 2006 dollars. Those figures will be wite different 25 years from now.

You can no longer pay into the UK National Insurance as a resident of Canada.

There are all sorts of possibilities depending upon the prevailing interest rate and whehther the purchase qualifies for CMHC financinag and gurantees to teh lender.. In general, you wopuld need about $55 to 60,000 of income to justify a new purchase as described.

Once you become a resident of Canada with a home available to you, you can expect that Canada will tax your cruise ship income. Goto andread the US/Canda taxation section in the seconbd box down on the right hand side. There are lots of examples there showing how Canada taxes its residents and citizens. To escape this, you would have to have a full blown home in another country where you spent more than 183 days of the year.