Thanks - I will speak to my RRSP banking institution before I proceed with anything.

If you don't touch it for 5 years (from the time you stopped residing in the UK) then there would be no penalty from the UK, you would just pay any Canadian taxes/with holding tax due.

If you withdraw it before the 5 year period is up then you would be penalised the 55% (plus Canadian taxes).

It isn't locked in - it's the Inland Revenue in the UK that set the rules with regards to the 5 year period. Your QROPS provider is required to notify the Inland Revenue if you make a withdrawal - if within 5 years then the IR would penalise you.

No, the 55% UK penalty is charged if you withdraw funds from the RRSP before you have been non-resident in the UK for five complete UK tax years. In addition, you will pay Canadian taxes on the withdrawal.

After the five years you can withdraw free of UK tax - you just have Canadian taxes to deal with.

Thank you both this has been really helpful. Not the answer I wanted, but helpful all of the same

I stand corrected

Under QROPS rules, the RRSP provider is obliged to report any withdrawals from a uk transferred pension for up to 10 years from the date of the transfer. If you have not been left the UK for 5 full tax years or more the UK will charge an unauthorized withdrawal fee of up to 55%............this is separate and in addition to any applicable Canadian taxes for making a withdrawal from an RRSP.

Guys, excuse me if this has been asked before, but I'm a bit confused about the whole QROPS thing ...

I am 35 and have worked in the UK for 11 years, paying minimum NI contribution that qualifies me for a UK state pension.

I will be moving to Canada this year (hopefully), and was wondering if I need to do something to get these 11 years counted towards a state pension in Canada? Not sure if possible at all ...

Or do I just ignore it and start from scratch in Canada? Would I get two pension in this case, even though the 11 in the UK will be a very very minimum? Could I potentially pay voluntary NI contribution in the UK so I get higher state pension from the UK when I reach the retirement age or it doesn't work like that?

Also, my wife has worked 7 years in the UK ... not sure where that leaves her.

Hi Barcomi,

you cannot transfer state pension benefits via QROPS to Canada.

QROPS only allows the transfer of any company or personal pensions that you may have built during your time in the U.K

Hi mjwalker007,

Thanks for the info! I will try to find out how does it work with state pensions ...

The rules are chaning in the UK at the moment but it is expected that you will need 35 years of NI contributions to get a full state pension and that you will need 10 years to get anything. It will be prorated in between so you will get 11/35ths of a UK state pension. If my current understanding of the proposals is correct.

Canada has two state pensions. The Canada Pension Plan is based on your contributions during your working life, and Old Aged Security is based on the number of years you are resident in Canada.

I read somewhere about the minimum is 10 or 11 years. In this case 11/35ths will be better than nothing! I will try to find if my wife can continue to pay for 4x years to make the 11 years, as she only has 7 ...

Didn't know Canada has the two state pensions, thank you.

Does anyone know how this would work with the Home Buyers' Plan where you can use some RSP savings towards a deposit on a home?

If I transfer my UK pension into a Canadian RSP (Not Locked In) can I use that money in the Home Buyers' Plan?

Thanks

Unless you are over retirement age you won't be able to transfer your funds into an unlocked pension plan in Canada.

http://www.hmrc.gov.uk/pensionscheme...r-overseas.htm

I have, but the general rule is you can't.

Hi my NHS pension has been transferred to a qualifying QROPS I know there are penalties for withdrawal, but how have you put yours towards your mortgage/down payment without penalty?