Is my British pension taxable in Canada?

[timpjoh]

Does it affect the pension credit adjustment?

[TonyC11 · Accepted solution]

Yes!

By tax treaty between Canada and the UK, any Pension arising from a UK source and received

In Canada is fully taxable by CRA. 

However, such pension is exempt from UK tax and the income should be treated with tax code NT by HMRC.

The above applies to both UK State Pension paid from Tyneview Park, and any private pension plan, for example BT pensions.

The above assumes you are Resident in Canada for tax purposes.

If you are referring to Pension Adjustment (PA) as in box 52 of your T4, this would not be affected.

However, Pension Credit can include Foreign pension amounts.

[West_123]

Can I include a British pension when calculating split-pension amount?

[TurboTaxSusan]

@West_123 It depends. If it is tax-free in Canada because of a tax treaty, then you can’t use it for pension splitting. But if you pay taxes on it in Canada, then you can use it.

[pietro1]

Hi,

How would I claim pension splitting on U Pension  in TurboT ?

I put this in Foreign income as a foreign pension but do not see how to include it in the splitting calc.

Peter

[kbalm3]

Is a UK Pension Commencement Lump Sum (PCLS) payment taxable in Canada if received by a Canadian resident who has never been a UK resident for income tax purposes?

Thanks,

Chuck

[TonyC11]

Yes, your UK Pension, or other foreign pension, can be used for pension splitting, if you otherwise qualify.

Only OAS, GIS and CPP payments are always ineligible for pension splitting.

[TonyC11]

Not quite the case, you pay tax on OAS and CPP but neither are eligible for pension splitting.

As stated, by treaty, UK pensions are taxable when received in Canada.

[TonyC11]

Yes,

In fact your foreign pension MUST be included. In the amount considered for pension splitting.

CPP, OAS and GIS cannot be included.

[TonyC11]

By treaty with the UK, recurring pensions are not taxed where they arise, and are always taxable in. Canada by CRA.