Your UK pension when emigrating from the UK to Canada

If you're moving from the UK to Canada, one of the first money questions is what happens to your pension. The destination system here is RRSP / TFSA.

Can you transfer a UK pension into RRSP / TFSA?

There is effectively no working QROPS route from a UK pension into a Canadian RRSP — Canadian plans are not QROPS-registered. Most people leave the pension in the UK and draw it later; the UK-Canada tax treaty covers how UK pension income is taxed once you are Canadian-resident. Canada taxes worldwide income for residents — get advice on timing before you land.

The 25% overseas-transfer charge

HMRC can apply a 25% Overseas Transfer Charge to a UK pension moved into a QROPS that doesn't meet the exemption conditions. Getting this wrong is one of the most expensive mistakes in the whole move — model it before you transfer anything.

Your real options

• Leave it invested in a UK SIPP or workplace scheme and draw it later — usually the simplest, and often the best.
• Where a compliant QROPS exists in Canada, transfer after taking advice on the overseas-transfer charge and the destination's tax treatment.
• A blend — consolidate UK pots into one SIPP now, decide on transferring once you're settled and the tax picture is clear.

Decide what happens to your pension before you move money — the right answer is tied to your UK residence status, your age, and whether Canada has a QROPS-registered scheme.