If you are a British ex-pat living in Canada, or have at some stage lived in the UK, and want to move your personal or company pension to Canada, the good news is that you can, via a process known as QROPS.
QROPS, or Qualified Recognized Overseas Pension Scheme, facilitates the transfer between pension plans in the United Kingdom and pension plans in other countries, such as Canada. These overseas pension plans must meet the requirements established by HMRC (Her Majesty’s Revenue and Customs). In Canada, this requires moving your pension into a qualified RRSP (Registered Retirement Savings Plan) which has QROPS status.
Will I Need to Pay Taxes on My UK Pension Transfer?
If you have contributed to a private or company UK pension and are 55+, the transfer from the UK pension into a Canadian RRSP will be free from any UK taxation as long as QROPS rules are adhered to.
Is the Transfer a Quick Process?
If you were hoping that a QROPS transfer would be as straightforward as a typical bank transfer, unfortunately this is not the case. QROPS is an in-depth process with various forms of information required. These details need to be collated and checked between financial institutions (and government entities) in the two countries. That’s why the transfer process itself can take a few months and is best handled by a transfer specialist that can monitor the process and ensure that the correct information has been collected and submitted to the appropriate channels.
Do I Qualify for QROPS?
QROPS in Canada are designed explicitly for ex U.K residents who now :
- Live in Canada with an expatriate status
- Will reside in Canada for a minimum of five years (or plan to)
- Will retire in Canada (or plan to)
- Want their pension savings in Canadian dollars
Where Can I Put My QROPS in Canada?
Once you have decided to move your UK pension to Canada, the entire pension must be placed into an RRSP with a provider that has QROPS status. Only those 55 and older can open a QROPS, as HMRC regulations require that no pension payment can be made before the pension member reaches 55.
Navigating the complex requirements of a QROPS transfer can be daunting. We’re here to help. Contact Sterling Advisory today and get professional advice on how to best transfer your UK pension to Canada and get sound advice on the ins and outs of shifting your pension scheme to an RRSP/RRIF.