Transferring a U.K. pension to Canada

iA Clarington is a provider of the Qualifying Recognised Overseas Pension Scheme (QROPS), a retirement savings plan that allows eligible persons to transfer their U.K. pensions to another country.

Potential benefits of QROPS include:

  • Tax efficiency
  • Favourable inheritance transfers
  • Reduced currency-related investment volatility
  • Access to a wider range of investment options

iA Clarington's RRSP accounts and mutual fund offerings are eligible for QROPS transfers.

How it works

QROPS is appropriate for persons between the ages of 55 and 71 who hold a qualifying U.K. pension and intend to live outside of the U.K. for more than five years.

Transferring a U.K. pension is relatively straightforward. The investor submits the following forms via an advisor to iA Clarington:

  • Original termination and/or transfer forms provided by the U.K. pension administrator
  • HMRC member information form APSS263
  • U.K. pension plan client statements
  • iA Clarington U.K. pension transfer application form
  • iA Clarington mutual fund investment application form
  • Proof of identity (copy of government ID ie. passport or driver’s license)
  • Proof of residence (ie. utility bill)

iA Clarington submits the following to the U.K.:

  • Completed transfer forms for the U.K. company administering the pension, with copies for the U.K. Pension Administration
  • Letter showing the QROPS reference number
  • Banking details for wire transfer
  • HMRC member information form APSS263 completed by the client
  • Proof of identity (copy of government ID ie. passport or driver’s license)
  • Proof of residence (ie. utility bill)

U.K. Pension Administration sends pension funds to iA Clarington

A cheque or wire transfer is sent from the U.K. to iA Clarington (amounts may be in GBP, requiring conversion to Canadian dollars).

Once iA Clarington receives the funds, we will invest them according to the advisor’s instructions.

The U.K. minimum pension age of 55 still applies, and benefits cannot be taken before then. However, a QROPS can offer considerably more flexibility, greater income potential and more investment freedom than a U.K. pension. It is also important to note that a QROPS transfer to iA Clarington may not be initiated past age 71.

Tax implications

Ongoing reporting to HMRC is required for withdrawals that occur under two possible circumstances:

  1. During any period when the client has been a U.K. tax resident in the year of the transaction or any of the previous five U.K. tax years (the U.K. tax year ends April 5), or
  2. Within 10 years of the date that pension funds were deposited into the QROPS account.

If payments in the reporting period are considered "unauthorized payments," they would be subject to U.K. tax charges and possible penalties. HMRC will review the nature of the transfer and/or withdrawal and determine whether an unauthorized payments charge and possible additional surcharge will apply.

Transferring funds

iA Clarington requests QROPS money transfers by wire in GBP, but occasionally payment is sent by cheque. Funds wired in GBP will be subject to the currency conversion rate charged by the bank we use for wire services.

Speak with your advisor to learn if you qualify.