What are your pension options as a UK expat in Canada?

Shannon Hope

Shannon Hope, pressing the security button under his desk as you walk in

What are your pension options as a UK expat in Canada? We have NO IDEA WHATSOEVER.

So luckily, we have a guest article from Shannon Hope. He is a senior wealth advisor at Expat Advisory Worldwide in Toronto [Facebook link if you’re a social media guru].

Shannon is also a retired professional hockey player who played for the Peterborough Pirates, the Cardiff Devils and Captained the Great Britain national hockey team from 1995-1997. Shannon was inducted into the British Ice Hockey Hall of Fame in 1999.

Face off, and here we go …

What to do with one’s UK pension is the question on the minds of many UK expats in Canada. After all, Canada is one of the top destinations of choice with over 600,000 UK expats.

Up until 2006, there were no options. However, in April 2006, a new program was launched in the UK as part of new legislation with the objective of simplifying pension schemes.

This program, called the Qualifying Recognised Overseas Pension Scheme (QROPS), is an overseas pension scheme that meets certain requirements of the HM Revenue & Customs (HMRC) and can receive the transfer of UK pension benefits without incurring taxes or charges.

As a result, UK expats may be able to transfer their UK pension to an approved RRSP provider in Canada.

QROPS are increasingly popular with UK Expats in Canada due to the tax advantages they offer on pension drawdowns and the ability to designate a beneficiary in the event of the pension owner’s death.

Pension funds left in the UK are heavily taxed, commonly referred to as a death tax, and could be as high as 55%. Transferring a UK pension into a QROPS eligible RRSP in Canada can help avoid UK taxation.

There are many advantages to transferring your pension such as:

  • The Canadian Dollar/British Pound exchange rate is at the best it has been in quite some time
  • Minimizing taxes and leaving more of your hard earned dollars to your family/estate
  • Control and consolidation of your assets

There are many other factors besides the QROPS legislation to consider including your personal financial situation and estate planning priorities.

At Expat Advisory Worldwide Inc. our team of wealth advisors are seasoned experts in UK pension transfers and can assist UK expats in developing an integrated, comprehensive and customized financial plan.

Thank you , Shannon. We never knew all that actually so have learned something too!

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