Benefits of Transferring Your UK Pension to Canada
Tax Free Spousal Roll Over
Upon death, your UK pension in Canada will roll over to your spouse TAX FREE. This is because your pension will be a RRSP account in Canada which the CRA allows to be transferred to a spouse tax free at death. If left in the UK, you could be subject to tax at death and/or lose a large portion of your pension.
No Tax Liability to the UK
You will not be subject to any taxation in the UK when withdrawing your pension funds in Canada. You will only be subject to tax in Canada which is dependent on your total income in the tax year that you withdraw from your pension (RRSP).
Currency Risk / Exchange / Fluctuations
Your pension will be held in Canadian dollars if you transfer it to Canada. This eliminates the risk of currency fluctuations of the pound sterling and provides you with more control on your retirement income. Withdrawals in retirement will be in Canadian funds.
Choosing Your Beneficiary
You have the ability to name a beneficiary on your pension to ensure that the balance of your pension goes to person(s) of your wish at death. Your beneficiaries will receive the full remaining amount of your investment because your investment has the ability to bypass probate and estate fees.
Retirement Income Options
You have full control of your retirement income options when it is in Canada. Choose between regular scheduled withdrawals or lump sums. You have the ability to decide how and when to take income from your retirement account. This provides the potential for a higher income in retirement.
Guarantee Your Principle
Currently Industrial Alliance is an eligible investment provider accepting UK pensions in Canada. They offer a product which can guarantee up to 100% of the initial transfer value of your pension when it arrives in Canada. This adds another layer of protection on top of your hard-earned money.
Lifetime Allowance (LTA) Limits
Transferring your pension from the UK helps solve the tax issue on excess Lifetime Allowance LTA) Limits. Currently, the LTA Limit is at £1,073,100 and frozen until 2026 (according to 2021 UK Budget). Consult with us for more information regarding LTA Limit.
At death, your estate will be much easier to handle for your heirs if your investments are not scattered across multiple countries in different currencies and investment accounts.
UK Pension Transfers Are Available Again (2023)
As of September 2019, UK Pensions (QROPS) can be transferred into a Canadian RRSP.
Simon Huften at Strata Wealth has helped Expats for years transfer and manage their UK pension schemes in Canada.
Transferring your pension is easy when you have the right guidance and advice.
Our 3 Step Transfer Process
Introduction & Discovery
The first step is to ensure that you are currently a Canadian resident age 55 or older and that you have a pension scheme in the UK that you are interested in transferring to Canada.
If so, we need to have a short discussion to determine if your pension is a QROPS which means that it is eligible to be transferred to Canada by HM Revenue & Customs. We also need to understand your current financial situation in more detail and see if it is in your best interests to transfer your pension from the UK to Canada.
Once we have mutually agreed that it is beneficial to transfer your UK pension to a qualified retirement account in Canada, you will need to authorize us to start working for you. With your consent, we will contact your pension provider(s) to request up to date investment/transfer values, as well as any relevant documents required to start the transfer process.
Throughout this entire process there is no cost for the work we are doing as we are commissioned by the investment provider in Canada.
Transfer of Funds
After we have received the necessary information from your pension administrator (current values, forms, etc.), we will be in touch with you to review everything and complete the required application/transfer documentation. This can all be done via phone, email or in person- whichever you prefer.
We will take care of everything including setting up your new investment account in Canada, processing transfer requests, follow-ups, etc.
REQUEST A CALL BACK.
Would you like to speak to one of our financial advisers to review your UK pension? Just submit your details and we’ll be in touch shortly. You can also email us here if you would prefer.
Trusted QROPS Advice
10+ Years Experience
We have over 10 years experience working in the financial and insurance services industry. Simon Huften specializes specifically in UK pension scheme transfers (QROPS) and is able to smoothly transition your UK pensions to Canada in a very timely manner. You will also be fully supported and serviced after the transfer.
$150+ Million in Assets
Strata Wealth manages well over $150M of assets which includes UK pension schemes (now RRSP/RRIF accounts in Canada) as well as other investment accounts (TFSA, etc.). Our UK clients benefit from our specialized pension transfer service. You can be assured that your transfer is being handled by a team of professionals.
Our connections in the UK and Canada ensure a smooth and safe transition of your UK pension scheme to Canada. This allows us to successfuly transfer your QROPS into a registered investment account in Canada quickly and at no expense to you from us. Our team at Strata Wealth will take care of everything.
Providing In Person Service
If preferred, we can provide you with personalized in person service throughout certain provinces in Canada.
Our client base is located across Canada so we spend a lot of time travelling to see our clients physically in British Columbia, Alberta, Ontario, Manitoba, etc. Many of our clients also enjoy communicating via Zoom, phone and email.
Frequently Asked Questions
Qualifying Recognized Overseas Pension Scheme, also called a QROPS is a private or public pension account that is held in another country (in this case, United Kingdom) and meets certain criteria that makes it eligible to be transfered to another country (e.g. Canada).
Our services allow us to help Expats who have moved to Canada permanentely to transfer their UK pensions to Canada into an RRSP (Registered Retirement Savings Plan). You can read about the benefits of transferring your UK pension to Canada by clicking here.
Transferring UK pensions to Canada is our area of expertise.
The first step would be to contact us to determine if your pension is eligible to be transferred to Canada. If it is deemed eligible and you decide to proceed, you would sign a letter of engagement that would allow us to start working on your behalf to gather updated pension values, complete transfer paperwork, etc. Basically, we will handle all of the affairs for you.
Please Note: You must be age 55 or older to qualify to transfer your pension account from the UK to Canada.
You can learn more by clicking here.
At Strata Wealth, we do not charge a fee to complete the transfer of funds from the UK to Canada. Our firm is 100% compensated by the investment provider who receives the funds when they arrive in Canada.
If your pension in the UK is a “Defined Benefit” (final salary) pension with a value greater than £30,000 or a “Defined Contribution” (money purchase) pension with a value greater than £30,000 and has a guarantee on the amount that you’ll be paid when you retire, you will require a FCA approved, qualified financial adviser in the UK completed an analysis of your pension and provide you with something called a “Certificate of Advice”. In most cases this is going to be required.
There is a cost involved to have this completed. We have a referral arrangement with UK financial advisers who specialize in this who can complete it for you. We will provide the referral if you decide to move forward.
Unfortunately, yes. You must be age 55 or older to transfer your pension from the UK to Canada.
The age 55 rule was introduced a few years ago by HMRC.
There are many advantages of transferring your pension from the UK to Canada. We have a separate page on our website which talks about the benefits of having your pension in Canada. You can visit it by clicking here.
Some of the advantages include tax free spousal roll-over at death, no tax liability in the UK, no currency fluctuations, easier management of funds, principal guarantees, simplicity at death and more.
As of January 2023, you can choose to invest your pension money in mutual funds or segregated funds. The qualified for provider in Canada for mutual funds is iA Clarington and for segregated funds is Industrial Alliance.
In a nutshell, mutual funds typically have lower investment management fees compared to segregated funds. Segregated funds provide much better guarantees, estate protection and benefits when compared to mutual funds.
We will help you understand the differences between the two investment options to help you decide what is best for your situation.
You can learn more by reaching out to us by clicking here.
At Strata Wealth, we are a close-knit group of hardworking and dedicated financial experts, working out of offices across Ontario and British Columbia. Our goal is and has always been simple: to use our knowledge and experience to support and guide our customers in creating tailored wealth management strategies. Whether it’s helping an entrepreneur to grow their business or advising people on how to plan for their retirements, we are looking out for you and your interests, not our bottom line.
Simon Huften is the head of our UK pension transfer division and specializes in working with expats transfer their pensions from the UK to Canada. If you decide to work with us, you will be communicating directly with Simon and his team who will provide expertise in ensuring a safe, timely transfer of your pension assets to a registered account in Canada.
Is QROPS For Me?
Transferring your pension from the UK to Canada is a very complicated process and is not for everyone. There are many different things to consider before deciding to move forward. Here are some guidelines to follow if you are considering transferring your pension to Canada.
- You must be 55 or older to open a QROPS RRSP account in Canada.
- You must hold a non-state pension scheme in the UK and be a Canadian taxpaying resident with an intention to live in Canada for at least 5 years.
- Ideally do not have any intentions to move back to the UK.
- Not all pensions from the UK can be transferred to Canada (contact us for more details).
- Defined Benefit Pension Plans (aka Final Salary Pensions) and Defined Contribution Pension Plans (aka Employer Matching Pensions) which have a market value greater than £30,000 require a qualified FCA approved UK financial adviser to review and complete an audit of your pension. We have relationships with UK advisers for this purpose.
- Public Sector Pensions cannot be transferred from the UK to Canada. Examples are civil service and teacher pensions. The majority of NHS pensions cannot be transferred.
Recent Blog Posts
Key Points UK QROPS transfers to Canada are currently permitted (as of 2023) You must be age 55 or older to qualify to transfer a pension scheme Certain pension schemes are not eligible for a transfer Transfer process can be complicated and timely – work with a professional Pension funds are converted to Canadian DollarsFebruary 10, 2023
Key Points Withdrawals from a QROPS RRSP are 100% taxable as income Withdrawals from a QROPS RRIF are 100% taxable as income At age 71, you must convert your RRSP to a RRIF You must be age 55 or older to transfer a UK pension to Canada All withdrawals are reported to HMRC for 10January 5, 2023
If you have moved to Canada from the UK permanently, but still have a previous private employer pension in the UK, you may be wondering what the key benefits of transferring it to Canada are. There are several key benefits to transferring a UK pension to Canada, including: It’s important to note that there areJanuary 4, 2023
Key Points You must be age 55 or older to transfer a UK pension to Canada Pension values over £30,000 must be reviewed by a UK advisor Transfer process can be complex – use a professional Non-state UK pensions can be transferred to Canada Not all UK pensions can be transferred to Canada QROPS –January 2, 2023
Key Points – QROPS can be transferred to Canada as of January 2023 – You must be age 55 or older to qualify – There are many attractive benefits to transferring your pension – Consult with a professional before making a decision to transfer QROPS Overview QROPS (Qualifying Recognised Overseas Pension Scheme) is a typeJanuary 2, 2023
Key Points Segregated funds combine the features of mutual funds and insurance contracts Built-in principal guarantees and death benefit protection Popular choice of investment for UK pension transfers to Canada Bypasses probate fees at the time of death and goes directly to beneficiaries Industrial Alliance is qualified to offer segregated funds for QROPS A segregatedMarch 13, 2023
Key Points QROPS are more regulated by the UK compared to Canada HM Revenue & Customs regulates QROPS in the UK Each province regulates QROPS individually in Canada You must be age 55 or older to transfer a UK pension scheme to Canada Seek professional tax and financial advice before transferring a pension scheme QROPSMarch 9, 2023
Key Points 5 year rule is applicable to UK pensions transferred to QROPS in Canada UK taxation could occur if you are still a UK resident within 5 years of making a withdrawal This rule is in place to discourage tax avoidance Always seek professional advice when transferring a UK pension to Canada A QualifyingMarch 3, 2023
Key Points Tax is not payable when a pension scheme is transferred from the UK to Canada Investment growth is not taxable when the pension funds are invested in Canada Any withdrawals from a QROPS RRSP or QROPS RRIF are 100% taxable as income QROPS RRSP / QROPS RRIFs are transferred tax free to aFebruary 26, 2023
Contact Us Today - Free Consultation
Please let us know if you have a question, inquiry or would like further information on transferring your pension from the UK to Canada.