How much tax will I pay on an RRSP withdrawal if I live outside of Canada?

Jamie Golombek, vice-president of taxation and estate planning at AIM Trimark Investments, has the answer.

Jamie Golombek 10 February, 2003 | 2:00PM

Dear Expert:

I am interested in knowing what tax rate would be applied to RRSP withdrawals if I am living outside of Canada at the time the funds are withdrawn. Is it the taxation bracket that I was last in before leaving Canada?

Expert Opinion:

When you say that you are "living outside of Canada", we assume that at the time of the withdrawal from the RRSP, you are considered to be a non-resident of Canada. If so, Canada imposes a flat rate withholding tax on lump-sum withdrawals from an RRSP. The tax bracket that you were in prior to leaving Canada is irrelevant for these purposes. The rate of non-resident withholding tax on RRSP withdrawals is generally 25% but, in very limited situations, may be reduced depending on the tax treaty negotiated between Canada and your new country of residence.

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Jamie Golombek

Jamie Golombek