Pension payments are subject to tax in Canada. It doesn’t matter if the source is in Canada or the UK.
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 for retirement expenses. If you don’t transfer it, when you retire, the pension will pay out in pounds and there is all the hassle and expense of converting them to dollars each time. The amount you receive in Canadian dollars would fluctuate with exchange rates – experts recommend that your income and expenses should be in the same currency. Fewer surprises!
Give us a call or e-mail and we would be happy to explore if you are eligible to transfer a UK pension and whether or not it makes sense for you.