Client living in Canada, wants to take lump sum pension money from the UK. Here is the rule (You can usually take up to 25% of the amount built up in any pension as a tax-free lump sum. The most you can take is £268,275.) Are they allowed to carry forward that exception here in Canada when they file their taxes or will they pay tax on it and only be except in the UK
You’d have to find something in Canadian Tax Law that allowed that exemption.
Check the tax treaty with the UK in the pensions section. The Canada-US treaty for instance says Gov’t pensions (CPP, OAS, US SS) are only taxable in the country of residence and not in both. For most other countries it’s 25% or 15% max tax payable in the country paying the pension. If it’s protected under Canadian law it will be in there. Nothing in the Canadian Tax Act as far as i am aware.