Know About the Procedures Involved in Making UK Pension Transfer to Canada

Know About the Procedures Involved in Making UK Pension Transfer to Canada

05:36 20 February in Blog

If you are thinking of moving to Canada after retirement, you can have your pension transferred to that country from the UK. The HMRC may have already removed all Canadian QROPS schemes (except for three) from its list, but there are still alternative strategies that international pension transfer specialists can help you with. UK pension transfer to Canada is still possible with a Canadian Recognised Overseas Pension Scheme (ROPS), as well as through another well-known QROPS jurisdiction.

The UK pension transfer to Canada is a commonly practised financial planning strategy by former UK residents who are now citizens in Canada. However, since February 2017, it is already impossible to transfer pensions to Canada. Your only option is to transfer to jurisdictions like New Zealand, Hong Kong, or Malta, and it comes with a 25 percent tax charge. If you are already a resident in Canada, there are still UK pension transfer alternatives for you, and that is through an international Self Invested Personal Pension (SIPP). This means that your pension will not be moving physically to Canada, but this scheme should provide a similar outcome to what ROPS was able to provide.

SIPP is like QROPS in terms of design where it is still considered a pension that has been established under a trust. The difference lies in the fact that it remains a UK scheme, so you do not have to worry about the 25 percent transfer charge overseas. However, it will still provide you with flexibility on how you can invest your pension and the option to hold investments in Canadian dollars. You are also given the flexibility on how your pension lump sums and income can be withdrawn, and you are not obligated to take annuity or a scheme pension from an existing UK pension when it is transferred to your SIPP.

Be sure to get in touch with a specialist regarding UK pension transfer to Canada to learn more about SIPP and other options that might make sense to your situation. Leading international pension transfer specialists offer a free initial investigation that can help you understand your financial situation and find the right transfer scheme for you.