# Trying To Exit Sunlife Financial



## Michinagi (Jul 29, 2015)

I will say right off, I am not an experienced investor, and have joined this site to (hopefully) find a solution to my problem.

The story is thus: Years ago, through payroll deduction, I started investing with Sunlife Financial,with my funds going into an RSP mutual fund. Years later I started to take more interest in the account - although the funds are small - and decided to make a lump sum investment into said account. However, the transfer went awry, for various reasons, and I was left with a really bad taste in my mouth after dealing with their unhelpful customer service. I would prefer to move that money to a new investment account with a different company, but I am worried that any "withdrawal" might make me susceptible to taxes, although it would be a lateral move (in my layman's mind anyway).

To further complicate the matter, I am not currently living in Canada, but in Asia, and in order to open certain types of account, such as GIC, RSP, brokerage accounts, and so on, I need to at least appear in a financial institution and present some identification, which I am unable to do. I also pay local taxes, so sheltering my money in Canada is unnecessary.

Basically I am just asking for general advice on this situation, and I am open to suggestions. Obviously, for a novice, the simpler the better. I am really unimpressed with Sunlife however, and feel moving my money out of their grubby hands will be a personal victory, though they probably won't even notice.


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## gardner (Feb 13, 2014)

Once you have a destination RRSP account at a different institution, you can have your holdings moved from SLF to the new one without "withdrawing" any of it and without creating any tax problems. It is possible that you can move the holdings in-kind, so that your units of mutual funds will come across as-is. With SLF, likely some of the funds will be things that can't be brought over in-kind. In this case you should understand if any of the funds you're holding at SLF had delayed sales charges or other lock-in provisions. If the funds have to be converted to cash to transfer and there are DSCs, you could get hit with up to 5% in fees on the way out.

There are other threads on this forum dealing with the same sort of situation -- search for "DSC", "RRSP transfer".


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## hystat (Jun 18, 2010)

your new adviser should be eager to help. They love taking business and are usually quite helpful with transferring what you have. They just need your latest statements usually and can tell you from that what fees you may incur if any. If the statements aren't clear, they'll get on the phone.


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## Beaver101 (Nov 14, 2011)

^^ *@ gardner:* Doesn't sound like a simple case of "in-kind" transfer for the OP's current situation which is out of country. First step is getting that new "destination RRSP" account established/set up. 

^ *@hystat*: Agree ... perhaps a first step consideration is to consult the "new adviser" of the financial institution holding the new destination RRSP account. Is there not a residency requirement for RRSPs?


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## Spudd (Oct 11, 2011)

If you transfer your RRSP money outside Canada you will pay a 25% departure tax, I believe. I don't have any personal experience with how this would be done, though. 

I know within Canada, you just open an RRSP at a new institution and then give them the Sun Life information - and they take care of getting the money from Sun Life. However, if you want to move it to a new country, the new country's institution may not know how to do that. 

I would suggest, if you decide you want to pay the tax and move it outside Canada, then just take your Sun Life statement to your new bank there and ask them if they can do the transfer.


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## Eclectic12 (Oct 20, 2010)

Michinagi said:


> ... I would prefer to move that money to a new investment account with a different company, but I am worried that any "withdrawal" might make me susceptible to taxes, although it would be a lateral move (in my layman's mind anyway).


First question ... what is your tax residency? 
Is it still Canada or are you a non-resident who has paid the departure tax?


Secondly ... a withdrawal will be subject to taxes. The only way to avoid paying the taxes today is to have paperwork filled out to register with the gov't that this is a change of institution - not a withdrawal.




Michinagi said:


> ... To further complicate the matter, I am not currently living in Canada, but in Asia, and in order to open certain types of account, such as GIC, RSP, brokerage accounts, and so on, I need to at least appear in a financial institution and present some identification, which I am unable to do.


Some of the online banks/brokerages seemed to be happy with a filled out form plus valid Canadian ID that was photocopied. I'm not sure if RRSPs have special requirements but if you are still a Canadian tax resident with valid Canadian id, this might work. 




Michinagi said:


> ... I also pay local taxes, so sheltering my money in Canada is unnecessary.


I'm not sure what this is trying to say.
Do you mean you are paying taxes locally on your RRSP funds?


If you have a preferred Canadian institution, I'd try calling them and identify that "if you can help make this happen, I'm interested in moving my funds over". Adding new business always get their attention and focus.


Cheers


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## gardner (Feb 13, 2014)

Beaver101 said:


> Doesn't sound like a simple case of "in-kind" transfer for the OP's current situation which is out of country.


I should have clarified my assumption that the O/P wished to keep the RRSP in Canada and only switch institutions -- a task that would take 5 minutes in person, but that would be a headache to organize from overseas. It would help greatly to be moving to an institution that the O/P already does business with and has accounts and profiles and so forth on record.

If the intent is to take the holdings out of Canada, then, yeah, that's a whole different kettle of fish.


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## Michinagi (Jul 29, 2015)

Thank you everyone for your feedback. I will try to clarify a few things, if I can.

1.) I am not entirely certain of my tax status. I left Canada quite some time ago, and haven't paid income tax at home since. I have, however, paid local income tax, but I have never declared anything in Canada. I doubt that is the right way to go about it, but I am not sure what else to do.

2.) I am looking to move the money to another institution within Canada. The main reason for this is dissatisfaction with SLF. If it seems more prudent to leave the money as is, then I can continue to tolerate them.

3.) As for a new repository for the money, I am unsure of any comparable institutions, and how to go about beginning to find one. As someone mentioned, it would be a simple thing to do if I were there, but being overseas makes is even more challenging. 

4.) It wouldn't necessarily need to be an RSP either, although that seems to be the best way to avoid penalties. But...if I currently have no income in Canada, wouldn't those taxes be refundable (being my income is under $10,000)? That would mean filing an income tax return though...something I haven't done in a while.


5.) totally off topic, but living abroad, not paying tax in Canada, or contributing to CPP, what kind of standing does this leave me in regards to old age pension (assuming there's any left in the vault when it's my turn to retire)?

Thanks again everyone, and sorry for being such a klutz.


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## cashinstinct (Apr 4, 2009)

Reading your post, Sunlife Financial is not your major issue.

The issue would be that you are uncertain about your tax status and you have not declared anything in Canada.

I would focus on this part first for sure...


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## Mortgage u/w (Feb 6, 2014)

If you are not planning to return to Canada and have no need for this investment account here, then personally, I would just cash in everything. They will withhold the required taxes and the rest is history. 

Your main issue really is your citizenship. Are you still a Canadian citizen or has it been lost due to the amount of time abroad? If you are now considered a non-resident and no longer have a Canadian social insurance number, then you will never be able to open an RRSP account elsewhere. Otherwise, nothing is holding you back to transfer your SLF RRSP to another institutional RRSP. Odds are you will need to convert your SLF funds to cash and transfer the cash while still within the RRSP. Search on-line who you want to invest with - the big banks all offer discount brokerage allowing you to invest in whatever you choose and you can easily track it on-line.

As for your pension, depending on how many years you contributed to CPP, you may be allowed to a portion back once you retire. Will there be funds by then? Of course! The CPP is self funded and cannot run out of money - unless all pensioners in Canada live forever and everyone else stops working/contributing to CPP.


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## gardner (Feb 13, 2014)

Mortgage u/w said:


> Your main issue really is your citizenship. Are you still a Canadian citizen or has it been lost due to the amount of time abroad?


I doubt this very much. Canadian citizenship doesn't lapse or expire and is quite difficult to get rid of.
Unlike the USA, taxation in Canada is based on residency, not citizenship anyway. As a non-resident, there is no strong need to file taxes unless you have income from Canadian sources. 



> If you are not planning to return to Canada


The O/P doesn't mention if he intends to move back to Canada at some point or not. This is a most critical planning point, IMO.


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## Eclectic12 (Oct 20, 2010)

Michinagi said:


> Thank you everyone for your feedback. I will try to clarify a few things, if I can.
> 
> 1.) I am not entirely certain of my tax status. I left Canada quite some time ago, and haven't paid income tax at home since. I have, however, paid local income tax, but I have never declared anything in Canada. I doubt that is the right way to go about it, but I am not sure what else to do.


This sounds like it is bad news and needs to be addressed before worrying about what company the RRSP money is with or whether it is left in the RRSP.

Note that I'm an expert but from what I've read, you either are a Canadian tax resident (i.e. have significant ties back to Canada regardless of where in the world you are) or you are a non-resident Canadian citizen. Tax residency does not affect citizenship.

Where you are a Canadian tax resident, Canada taxes your *worldwide* income. Deductions and credits as well as tax treaties may mean no income tax is owing but I believe you have to file a tax return for the deductions/credits.

If you've cut your ties so that you are a non-resident, the rest of the world income is no longer taxed. Income earned in Canada (ex. shares in a non-registered brokerage) will be subject to the 25% withholding but nothing else.

http://www.cra-arc.gc.ca/tx/nnrsdnts/cmmn/rsdncy-eng.html


You can request CRA to determine what is is ... but it does not sound like you've done that and likely the RRSP account will count under the "secondary residential ties". If there's enough secondary ties ... you are still a Canadian tax resident.




Michinagi said:


> 2.) I am looking to move the money to another institution within Canada. The main reason for this is dissatisfaction with SLF. If it seems more prudent to leave the money as is, then I can continue to tolerate them.
> 
> 3.) As for a new repository for the money, I am unsure of any comparable institutions, and how to go about beginning to find one. As someone mentioned, it would be a simple thing to do if I were there, but being overseas makes is even more challenging.


I've mentioned the online stuff institutions as that seems the likely best way, barring a visit to Canada. 

If you are a Canadian tax resident, own back taxes and CRA finds you instead of you going to CRA to say "I messed up" ... then there will be no opportunity to ask CRA to waive/reduce the penalties/interest that may be piling up.

I'd forget about the RRSP until you've worked with a tax specialist and worked this out with CRA.




Michinagi said:


> 4.) It wouldn't necessarily need to be an RSP either, although that seems to be the best way to avoid penalties. But...if I currently have no income in Canada, wouldn't those taxes be refundable (being my income is under $10,000)? That would mean filing an income tax return though...something I haven't done in a while.


]

RRSP or not ... big or small Canadian income or not ... the bigger is that unless a Canada/whatever country tax treaty helps you out - there sounds like years of income made in the country you are in that you haven't reported to CRA to be taxed on.

Factual residents:


> Your tax obligations
> As a factual resident, your income is taxed as if you never left Canada. As such, you will continue to:
> report *all income you receive from sources inside and outside Canada for the year and claim all deductions that apply to you;*


http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/tmprry-eng.html

If you can't get CRA to agree you are a non-resident ... there may be a nasty tax bill including penalties/interest in your future.


So my advice is deal with the tax residency issue, what tax treaties are available to help out before thinking about anything else.

Cheers


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## Eclectic12 (Oct 20, 2010)

gardner said:


> I doubt this very much. Canadian citizenship doesn't lapse or expire and is quite difficult to get rid of.


 ... unless you are a dual citizen who the gov't thinks is committing crimes abroad or involved in terrorism.

In general though ... I believe you are right but haven't researched it.




gardner said:


> Unlike the USA, taxation in Canada is based on residency, not citizenship anyway. As a non-resident, there is no strong need to file taxes unless you have income from Canadian sources.


But like the US, Canadian tax residents *regardless* of where they reside, have to report worldwide income. The OP is not sure of their status, has not been filing tax returns and appears to have at least one secondary residential tie, the RRSP account with SunLife. Hopefully, there is a tax treaty so that the "factual resident" status is converted to a "deemed non-resident".

It appears that any status that includes "resident" means reporting worldwide income (i.e. income from Canada and Asia) on a regular tax return.

CRA gives an example of a member of the Armed Forces posted to the US who cuts all their residential ties. Because they are a "deemed resident":


> The Canada Revenue agency considers Sean to be a deemed resident of Canada for tax purposes.
> When he files his return for the year, he will report his income from all sources both inside and outside Canada and claim all deductions, federal non-refundable tax credits, and federal refundable tax credits that apply to him.


http://www.cra-arc.gc.ca/tx/nnrsdnts/ndvdls/dmd-eng.html#txblgtns




gardner said:


> The O/P doesn't mention if he intends to move back to Canada at some point or not. This is a most critical planning point, IMO.


An important point for planning in the future.

Right now, should CRA see the OP as a "resident", "deemed resident" or "factual resident" who has not been reporting worldwide income for a long time - the penalties/interest that are likely growing is far more critical.


Cheers


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