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Old 31.03.2015, 20:46
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Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

Dear all,

I am new to the forum and spent significant time searching the posts but couldn't find an answer to my question.

I am Swiss and emigrated to Canada a few years ago. Before the move, I transferred my pillar II balances to a vested benefit account (Freizuegigkeitskonto).

Last year, I cancelled the vested benefit account together with my pillar 3a savings account and transferred the money to Canada (where I am a resident since my move).

Here comes my question:

Is this money considered income (and therefore taxable) or capital in Canada?

I always thought that by transferring my pillar II amounts to a vested benefit account (which isn't anything else than a savings account) before moving to Canada, I already withdrew the money and it is now capital only.

I am looking forward to any advise or links to supporting documentation. The tax treaty does not appear too clear on it.

Thanks!
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Old 19.11.2015, 18:37
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

Hi,

I am wondering quite the same thing for myself in the future. How did you manage this?

I did once read somewhere, and told in person as well, Canada is very picky with the dates. As long as you do not become a resident of Canada when the money is brought back to Canada, they will not treat it as income, you are still a non-resident. But if you do the transfer after your move home they would expect that to be claimed as foreign income..
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Old 19.11.2015, 20:06
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

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Hi,

I am wondering quite the same thing for myself in the future. How did you manage this?

I did once read somewhere, and told in person as well, Canada is very picky with the dates. As long as you do not become a resident of Canada when the money is brought back to Canada, they will not treat it as income, you are still a non-resident. But if you do the transfer after your move home they would expect that to be claimed as foreign income..
The Swiss pension wont let you have the money before you can prove your new residence
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Old 19.11.2015, 21:43
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

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The Swiss pension wont let you have the money before you can prove your new residence
what is "proof". I still get mail, have a permanent address in Canada. Unless the need a thumbs up i'm living dated photo.
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Old 19.11.2015, 21:45
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

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what is "proof". I still get mail, have a permanent address in Canada. Unless the need a thumbs up i'm living dated photo.
The Swiss assume you register as in CH, a letter from the tax authorities will do......
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Old 22.11.2015, 13:52
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

A lease may be enough showing address or utility bills.
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Old 22.11.2015, 16:02
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

In Canada You pay taxes on EVERY thing Don't forget to Pay the "Post on EF" Tax
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Old 09.01.2016, 22:58
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

I have been Googled quite a bit on this topic as well but I am still clueless about what to da.

I am now a permanent resident of Canada and I would like to transfer my 2nd. pillar billions out of CH and into Canada while the exchange rate is awesome.

What are my options?

Cash?
Tax?
Another retirement fund?

I have tried to call CRA but I end up in a loop of recorded messages :-(

I am thankful for any advice on this topic.
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Old 10.01.2016, 00:07
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Re: Lump sum withdrawal from vested benefit account in CH: taxable in Canada?

Funny you couldn't get anyone from CRA on the phone. So far, fingers crossed, I've always managed to talk with a human being after being asked to press this or that button. If you reach a dead end, you are choosing the wrong options. Nonetheless, CRA has brick and mortar offices, too, where you can go ask your questions, no appointment necessary (at least the first time around).

http://www.cra-arc.gc.ca/cntct/tso-bsf-eng.html

First, Canada and Switzerland have a tax agreement to avoid being taxed twice. This agreement also makes it possible to get pensions from both countries, or to transfer your earnings to one of them (where you reside).

Your 2nd pillar (or vested benefit account) is similar to the RRSPs in Canada, from what I understand. As such, in Canada, if you withdraw a sum of money out of your RRSP acct, you must pay it back within a certain amount of time. You could empty your accounts if you left the country, but with a huge tax hit (25%?) IN Canada.

http://www.investopedia.com/universi...eader_alt=true

But you did this in Switzerland with your Swiss pension money. Could you ask your Swiss bank or the gemeinde/tax office in Switzerland in which country the taxes get triggered? My bet is in Switzerland, because the money were earned here and tax-sheltered here. But rather than take my word for it, you should call your gemeinde. Here is an EF link talking about it (you said you searched)

Leaving, Cashing out Pillar1 and Pillar 2.

Just googling, I got this 2011 article. I doubt things changed much since then.

http://www.nationalpost.com/foreign+...511/story.html

Read and still do your own research regarding the advice and explanations provided within the article. Do check CRA's website, make a list of questions, then talk with your Swiss and your Canadian banks. I found that my credit union served my needs better than one of the big 5 when it came to financial advice.

Cheers and enjoy Canada!
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