If your UK pension plan is recognized as a company pension plan in Canada, when you transfer it to a special type of RRSP in Canada you will receive what amounts to a one-time increase in the RRSP contribution limits. You declare the amount transferred as income on your Canadian tax return 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.
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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.
Your RRSP contribution limits are not affected even if you deposit a large amount from a recognized UK pension plan to a Canadian QROPS.
Your RRSP contribution limits are not affected even if you deposit a large amount from a recognized UK pension plan to a Canadian QROPS. You declare the amount transferred as income on your Canadian tax return and then take a…
