QROPS - UK Pension Transfers to Canada (updated 2024)

QROPS – UK Pension Transfers to Canada


QROPS FAQs – Future Financial on YouTube 


If you are a UK pensioner looking for information on transferring your pension to Canada, we have the expertise to help. Future Financial Planning Group is an Ottawa based boutique financial planning firm that has successfully transferred countless non-government UK pensions to Canadian QROPS RRSPs.  We are able to service all provinces including Quebec.  Should you be interested in learning more, please contact our office.

A QROPS is a Qualifying Recognized Overseas Pension Scheme and the ONLY vehicle for which a UK Pension should be transferred into Canada.   In October 2019,  just two companies (IA Clarington and IAG) in Canada were approved by HMRC to facilitate transfers into QROPS accounts.  A third company, Cidel Alternate Retirement Plan (CARP) was added in January 2020.   The availability of QROPS is of considerable importance if you already living in Canada or if you are considering moving here and want flexible access to your UK Pension.

Key Benefits:
  • Consolidate your investments into your home country
  • Lock in the exchange rate of your pension assets
  • Solves the tax issue on excess Lifetime Allowance (LTA) limits. The LTA is currently at £1,073,100 and further to UK’s March 2021 Budget, frozen until 2026. Tax on the excess is 25% if transferring to a QROPS (not 55%, despite the fact that it involves a lump sum). How to apply for and check protections from the reductions in lifetime allowance. **NEW: From 6 April 2023 to 6 April 2024, the LTA charge will no longer apply in terms of calculating tax due on any excess pension savings.   **NEW: 6 April 2024  The Overseas Transfer Allowance (OTA) essentially replaces the LTA amount of £1,073,100. Where the transfer to QROPS exceeds this limit, the excess will be taxed at 25%. The limit applies to the total value of transfers to QROPS, not per scheme. If you are considering a transfer to QROPS and your pension benefits are close to or exceed £1,073,100, this should be done before the introduction of the new rules in April 2024 (note: this proposed law has yet to receive royal assent).
  • Known income stream and potential for higher income
  • Flexibility as the funds are within an RRSP/RRIF structure and not locked in
  • Greater investment choices
  • Ease of Estate administration
  • Opportunity to name your own beneficiary
  • Should you transfer your defined benefit/final salary plan?
Who are QROPS for?
  • Anyone that holds a UK non-state pension scheme who is a Canadian resident taxpayer and intends to live in Canada for a minimum of 5 years.
  • You must be at least 55 years of age to open a QROPS account.
  • Defined Benefit (final salary) pensions greater than £30,000 and Defined Contribution (money purchase) pensions greater than £30,000 with a guarantee about what you’ll be paid when you retire require an FCA approved, qualified UK financial adviser to complete a full analysis of your UK pension scheme and provide you with a Certificate of Advice.  *There are a limited number of UK firms that have the right qualifications and specialize in these types of valuations. Future Financial works with a limited number of specialized pension advice firms.
  • Defined Contribution pension plans must include at least $1 of employer contributions to qualify as a 60(j) direct transfer, otherwise the transfer could be treated as income.
  • Public Sector (Teachers, Civil Service)  pensions may not be transferred outside of the UK.
  • NHS pensions are complicated. From 6 April 2015, where a member has more than two years membership in the NHS Pension Scheme, transfers to schemes that provide ‘flexible benefits’ are not permitted.
What is required to initiate a QROPS transfer?
  • Contact Julie at Future Financial to discuss particulars and if a transfer is in your best interest.
  • Clients initiate the process by notifying their UK pension company they wish to transfer funds to Canada and obtain the necessary transfer forms. Note: do not request the Cash Equivalent Transfer Value (CETV) until you are 100% ready to proceed and if required, you have retained the services of an approved UK financial adviser. There is a three month guarantee date on the CETV after which you must request and pay for a second CETV if it falls within 12 months after the most recent request.
  • Open a QROPS account at the receiving institution in Canada (Future Financial will prepare forms).
  • Future Financial will help to complete the UK transfer forms and other applicable forms.  Member signs off on the forms.
  • Once all the forms in good order, they will be sent to the UK pension provider to process the transfer.
Important information regarding QROPS transfers
  • Mutual and Segregated funds are currently the only available options.
  • You must be 55 years of age or older to open a QROPS account.
  • The receiving institution will convert UK pension proceeds to Canadian dollars using the exchange rate on the day the funds are deposited.
  • Pension funds are most often sent to Canada via wire transfer and less often by cheque.
  • Funds received from multiple UK pension providers can be deposited to the same QROPS account.
  • Defined Benefit transfers can take up to 3-6 months to arrive as they are significantly more complex.
  • Defined Contribution transfers, not requiring advice can occur quite quickly, often within a few weeks.
  • Contact us to discuss transferring a “Delisted” QROPS into Canada.
  • The CETV is the cash sum the trustees are willing to transfer to a personal arrangement in exchange for you giving up your pension rights.
Important Information on Taxation
  • Like Canadian RRSPs/RRIFs, Canadian withholding taxes may applied when money is withdrawn from a QROPS and the amount of the withdrawal is added to your taxable income for that year.
  • While non-UK residents may be able to access the 25% tax free lump sum (pension commencement lump sum), the entire amount would be taxable* in Canada.
  • The QROPS provider must report all transfers or withdrawals made from the QROPS to HMRC for a period of 10 UK tax years after the original transfer date.
  • You can make a withdrawal from your QROPS.  All withdrawals are treated as taxable income in Canada and subject to your marginal tax rate.
  • If you are a UK resident when you withdraw from a QROPS, you will be subject to hefty member payment charges and UK taxation.
  • If payments in the reporting period are considered “unauthorized payments,” they would be subject to UK tax charges and possible penalties. HMRC will review the nature of the transfer and/or withdrawal and determine whether a 40% unauthorized payments charge and possible additional 15% surcharge will apply.
  • Pension funds are tested against the available Lifetime Allowance (LTA) (BCE8) and an LTA charge of 25% is applied on any LTA excess if transferred to a QROPS.
  • If your pension exceeds the standard LTA, contact us to discuss options to increase your LTA.  There is a possibility to save thousands in tax.
  • Tax on excess LTA cannot be claimed back through any foreign tax treaties.
  • If you change your Canadian tax residency status within the first 5 full UK tax years – April 6th to April 5th – after transferring into a QROPS, this would no longer be considered a recognized transfer and a unauthorized payment charge of 40% at minimum could be levied
  • The overseas transfer charge of 25% will not apply if you transfer to a QROPS in Canada and plan to reside in Canada for at least 5 UK taxation years after the date of transfer.
  • Be very careful if you intent to transfer to a SIPP rather than a QROPS.  If you are a Canadian resident, transfers to a SIPP are considered “constructive receipt” meaning the transfer is considered income and fully taxable in the year of receipt.  The Canadian Income Tax Act contains specific rules that allow for tax-deferred transfers from Canadian and foreign pension plans into RRSPs, provided certain conditions are met. However, these rules do not apply to transfers between foreign plans. You may be able to offset against your RRSP contribution room and you should consult a tax expert in this field.

See CRA technical interpretations below:




While this is a fantastic opportunity to get a hold of your hard earned assets and flexibility you desire,  careful planning must be taken to ensure that the transfer does not give rise to unintended tax consequences, bad financial advice and even scams.

The ability for QROPS transfers to Canada was removed in 2016 and there is always the chance that the program may be cancelled again.   Let’s discuss your specific pension and how we can bring it to Canada for you. Contact Julie by email or give the office a call (613-728-0589).


For more information visit https://www.gov.uk/topic/business-tax/pension-scheme-administration

*The Canada-U.K. Income Tax Convention (the “Treaty”) does not prevent Canada from taxing pension receipts. Paragraph 1 of Article 17 of the Treaty provides that periodic pension payments arising in the UK and paid to a resident of Canada shall be taxable only in Canada. Paragraph 3 of Article 17 broadly defines the term “pension” to include any payment under a superannuation, pension or retirement plan, as well as any payment made under the social security legislation in the UK.


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