RRSP payment to UK resident withholding tax?
Question
Hello,
I moved from Canada in 2003 and left my RRSP in Canada. I’m planning on withdrawing $10,000 from the RRSP this year. How much Canadian tax will they withhold?
Thanks for your time.
XXXXX
Answer
Hi XXX
Canada will withhold 25% of the RRSP payment at source. Unfortunately the withholding rate is not reduced by the Canada-UK tax treaty. Only when the payment is a “periodic pension payment” (RRIF or annuity) will the withholding rate be reduced to 0%.
If the $10,000 is more than 90% of your total worldwide income you could file a s.217 Canadian tax return to try and recover some of the 25% withholdings.
Hope that helps
Regards
Phil
Newsglobal, CA
250-661-9417