If you worked in the UK and left behind a pension plan when you took up residence in another country, the pension proceeds can usually be transferred to your new home. There are two major exceptions: The first is the old age or state pension and the second is any unfunded pension plan (often provided by the Public Sector e.g. National Health Service, Teachers, Civil Service, Police, Military). If you qualify, these pensions can be paid to you in Canada but cannot be transferred out of the UK as a lump sum.
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When your pension plan starts paying out, the amounts received will be taxable in Canada whether you leave the pension in the UK or have it transferred to Canada.
If you transfer your UK pension to Canada, it may qualify to go into a special type of RRSP. There is no tax on the lump sum transfer and you would only pay tax when you take some money out.
Some pension amounts are defined as “Trivial” and you can cash them in.
Right now, but subject to change, if the total lump sum value of your UK Defined Benefit and Defined Contribution pension plans is £30,000 or less you can withdraw the Defined Benefits amounts in cash and bring it to Canada.
If you are going to retire in Canada and you have a Defined Benefit Pension in the UK, life might be better if you transfer the funds to Canada.
Your retirement expenses will be growing in line with Canadian inflation (which could be quite different from UK inflation). So a transfer out into a QROPS may be a better fit with your retirement plans.
