AndyCivil

I'm getting a company pension from a UK company. Which box number?

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Canadian citizen, Canadian resident, Canadian taxpayer. I lived the first half of my life in Britain and earned a company pension, which I've now started to receive. They do not supply me with a convenient Canadian T## form, because they're a British company. I want to declare this income and pay the tax on it. What box should I put it in?

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Hi AndyCivil,

Your foreign pension may qualify for a tax deduction under the terms of a treaty signed between Canada and the originating country. If you do not know whether any part of your foreign pension is tax exempt, contact the CRA.

To enter the amount of your foreign pension income, follow the steps below:

1. In the "Left side menu on the Interview tab" select "Interview setup".

2. On the page that appears on the right, go to the "Investment income and expenses" group, check the box "Foreign income and foreign property (T1135)" and click on "Next" at the bottom of the page.

3- Return to the "Left side menu on the Interview tab" and select "Foreign income and property".

4- On the screen to your right, click on "Foreign pension income (includes U.S social security benefits)".

5- On the new page generated, you must enter the "Country from where you received the foreign income", a brief "Description of the source of the foreign income" as well as the "Exchange rate to apply".

6- For the line "Type of foreign pension income", choose the income that corresponds to your situation from the drop-down menu on your right.

7- For the line "Amount of foreign income received", enter the amount you received.

If part or the entire pension is exempt from tax under an agreement or a tax agreement concluded between that country and Quebec or Canada, you can claim a deduction for income not taxable under a tax treaty. The International Tax Services Office of the Canada Revenue Agency can inform you about these tax treaties and arrangements.

8- Once this information is obtained, for the line "Income exempt under a tax treaty (leave blank for US social security benefits)", enter the amount.

This amount will be reported on line 256 of the federal return and line 297 of the Quebec return. The code 12 will be entered on Quebec line 296.

For more details, please consult the CRA's website, as well as Revenu Québec's website if applicable, via the following links:

CRA:

http://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/personal-income/line-115-other-pensions-superannuation/line-115-pensions-a-foreign-country.html

Revenu Québec:

http://www.revenuquebec.ca/en/citoyen/situation/sejour_hors_quebec/pension-pays-etranger.aspx

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Thank you, I'm sure this is the right answer. I doubt that my pension would be "not taxable" in either country, because in the UK, as in Canada, the principle is the same: you put money aside tax-free when you're working, and then draw it and you do pay tax when you're retired (hopefully at a lower rate). The only thing that might be relevant for other people, is that the UK will tax the pension 'at source' if it exceeds a certain amount (I think it's £11,500). If that happened, then there might be some arrangement to avoid double-taxation. However, my pension is lower than this figure, so I won't pay anything in the UK anyway.

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