Everything You Need to Know About Transferring UK Pension to Canada
UK pension transfers for UK expats planning to live in Canada used to go through what is known as QROPS or Qualifying Recognised Overseas Pension Scheme (which later on became Canadian ROPS or Recognised Overseas Pension Scheme) or through another scheme set up in a different QROPS jurisdiction like Malta. Early in 2017, however, all Canadian QROPS were taken out of the ROPS list from HMRC, making UK pension transfer to Canada a lot trickier than it used to be. It is no longer possible to transfer UK pension to a domiciled scheme in Canada, pension transfers have to go through a different path these days, that is the SIPP or International Self Invested Personal Pension, which is a lot similar in structure to a QROPS, where pension is established under a trust, except that it remains a UK scheme, which means your funds are not subject to the 25% overseas transfer charge as QROPS funds are.
If you are contemplating a UK pension transfer to Canada, it pays knowing what your options are so you can choose the best approach that can help you make the most out of your hard-earned retirement fund. An in International SIPP allows you to enjoy all the benefits of a Self-Invested Personal Pension without having to physically move your funds to your destination country. International SIPPs can provide very similar benefits as Recognised Overseas Pension Schemes, but with greater flexibility in many aspects such as in terms of how it can be invested.
When you choose to make a UK pension transfer to Canada through an international SIPP, you afford great advantages like the option to hold pension investments in dollars if you wish to do so. An SIPP also provides the flexibility in terms of lump sum and pension income withdrawals as well as the freedom from annuity or scheme pension from your existing UK scheme once transferred.