Frequently Asked Questions

Ron Craig will help you with the four key steps:

1. Learn if your pension plans are eligible for transfer and about any tax consequences. Not all pensions can or should be transferred.
2. Choose an experienced QROPS investment adviser in Canada who will invest the transfer proceeds according to your wishes. Appointing the wrong adviser may cause unnecessary risk and expense.
3. Get expert guidance on completing the transfer forms and, if required by UK law, appoint a pension adviser and, finally,
4. Instruct the pension company to complete the transfer.

When the funds arrive in Canada your appointed adviser will make the investments and you will have the prospect of a better retirement.

No. There are basically two types of pension plan: (1) “Occupational Plans” where as part of a remuneration package an employer provides a retirement plan for employees (sometimes employees are allowed or are required to make extra contributions), and (2) “Personal Plans” where individuals (and or employers) make contributions which are invested to provide retirement income.

Occupational Pension plans can be transferred to a Canadian Registered Retirement Savings Plan (RRSP).

No tax is deducted in the UK and while the monies remain in the RRSP, no tax is payable in Canada. Although HM Revenue & Customs (formerly the Inland Revenue) will allow tax-free transfers of Personal Pension Plans from the UK, if a Personal Pension has all of its contributions made by the beneficiary i.e. there have been no company/employer contributions, it is not formally recognized as a pension in Canada and the receipt of the pension monies could create a tax liability in Canada for the beneficiary.

Upon request by e-mail we will be happy to inform you when we find a solution or we become aware of changes in relevant legislation.

The above is not intended to be a definitive analysis of tax law. The comments contained herein are general in nature and professional advice regarding your particular tax position should be obtained in light of your specific circumstances.

Usually no. However there are special types of UK plans that do allow such transfers – contact us to determine if your plan qualifies.

No. State pensions are not transferable.  However, once you become eligible, you can normally elect to have the payments sent to you in Canada.

Depending on the value and type of pension that you have, HM Revenue & Customs (formerly the Inland Revenue) may require that you have professional advice to determine if it is in your best interests to transfer a pension.

Advice from an adviser recognized by the UK Financial Conduct Authority (FCA) is required for Defined Benefit plans with a transfer value of £30,000 or over. We can determine if the advice is necessary and find a qualified adviser for you.

The professional adviser will charge a fee for this advice – it can usually be deducted from the proceeds of the lump sum being transferred. If advice is required for your pension, the pension fund trustees will not release the funds for transfer without receiving a written copy of the advice. Click here to watch a video explaining the advice process.

No. If your plan is eligible for transfer, you will receive what amounts to a one-time increase in the RRSP contribution limits.  You declare the pension transfer as income and then take a deduction for the contribution to the RRSP. The net result is no tax while the funds remain in the RRSP and you can continue to make annual RRSP contributions in accordance with the government rules.

No. Transferring a pension plan to an RRSP allows you to invest in just about any type of investment.  With the help of your personal Investment Adviser, you will set up a portfolio that contains the mix of cash, bonds, mutual funds and equities that suit your needs.  At one time there was a requirement to limit the amount of an RRSP that could be invested outside Canada.  These limits have now been completely removed. Your adviser will review your portfolio regularly to make sure it remains appropriate for your needs.

You may withdraw money from the RRSP when you reach “normal minimum pension age” as defined by HM Revenue & Customs.  It is currently 55 but may be changed from time to time.  Any withdrawal from an RRSP is subject to tax.

When you have provided the Investment Adviser with your plan details, he will contact the plan administrators to start the transfer process. While we would hope to bring the monies earlier, we have found that it can take two months to complete some transfers.

You cannot actually transfer your pension to an RSP until you have a Social Insurance Number (which is equivalent to a National Insurance number in the UK). This is issued soon after you immigrate. So if you are still in the UK, you can pull together all your pension information and be ready to contact us when you arrive.

Yes.  If you decide to leave Canada and live elsewhere, you may want to collapse the RSP that now holds the pension monies. This can be done but requires careful tax planning and is likely to incur substantial investment and other fees.

If you transfer the proceeds of a QROPS to another non-QROPS investment plan in Canada within the first ten full UK tax years, the whole amount of the original transfer will be subject to an Unauthorised Payment Charge of 55%.

Similarly, if you cease to be a Canadian resident for tax purposes (e.g. you leave the country for a substantial period of time) in the first 5 full UK tax years after a UK pension is transferred to a QROPS in Canada, HMRC will assess an Overseas Transfer Charge of 25% of the initial amount transferred.

On reaching retirement age, many UK pension plans allow withdrawals of up to 25% of the value of the plan. These amounts are not taxed in the UK.  If your plan remains in the UK but you are a Canadian resident, all payments from the plan are taxable in Canada. If you transfer the plan to Canada the monies remain sheltered from tax until you make a withdrawal. All withdrawals are taxable in Canada. Depending on how your plan in Canada is invested and how well these investments perform, over time, the tax on 25% of its transfer value should be offset by higher growth compared to leaving the plan in the UK.  However, there are no guarantees.

If you are thinking of transferring a Defined Benefit plan to Canada, you should contact an expert recognized by the FCA – there are not many firms that have the proper licence. We recommend Jim Bell of Dominion Financial Management in the UK.  Feel free to contact him directly or contact us and we will explain the process, discuss options and make a personal introduction if you wish. There is no charge for an initial discussion.