Personal Finance

Early Withdrawal of RRSP for Non-Resident (Hong Kong)

  • Last Updated:
  • Nov 9th, 2020 6:56 pm
Newbie
Jan 27, 2012
44 posts
2 upvotes
MISSISSAUGA

Early Withdrawal of RRSP for Non-Resident (Hong Kong)

Hi there, I have an RRSP account in with Scotia Bank and the money has been sitting there for a few years. Now that I have moved back to Hong Kong and having declared already as a non resident for the Canadian tax, I am thinking of withdrawing all the money from my RRSP account and essentially closing that account. Anyone has similar experience? I heard that for non-residents it will automatically be subjected to a 25% deduction for tax withhold. I assuming after that 25%, I don't even have to do anything further in terms of tax return as I have no any other income that are taxable?

Thanks for anyone that can help.
2 replies
Newbie
Jan 27, 2012
44 posts
2 upvotes
MISSISSAUGA
Anyone has similar experience on early withdrawal of RRSP?
Deal Addict
Jul 1, 2006
1051 posts
964 upvotes
ballboy168 wrote: Hi there, I have an RRSP account in with Scotia Bank and the money has been sitting there for a few years. Now that I have moved back to Hong Kong and having declared already as a non resident for the Canadian tax, I am thinking of withdrawing all the money from my RRSP account and essentially closing that account. Anyone has similar experience? I heard that for non-residents it will automatically be subjected to a 25% deduction for tax withhold. I assuming after that 25%, I don't even have to do anything further in terms of tax return as I have no any other income that are taxable?

Thanks for anyone that can help.
Scotiabank is responsible for withholding the 25% on your behalf, and you do not need to file a Canadian tax return as a non-resident. It's all taken care of as far as Canada is concerned by the flat 25% withholding.

I have no idea about tax treaties with Hong Kong/China, but for example if you were a US resident and you withdrew from an RRSP it is possible to claim the tax withheld in Canada against your US income tax, which can be an amazing deal if done correctly. Also in the US, you would owe tax any capital gains that had accrued inside the RRSP at the time you cash it out. Again, no idea what the rules would be in your case, since you are not in the US. But just be aware there may be some considerations related to taxes where you are currently resident.

Top