RRSPs and TFSAs When You Move to the UK
Retirement savings are one of the most consequential, and most commonly delayed, decisions Canadian migrants make. This isn't financial advice, but here's a plain-English overview of how RRSPs and TFSAs are treated once you're a UK tax resident, and how the UK's own pension system works for a newcomer.
Your TFSA loses its tax-free status in the UK
Your RRSP is treated more favourably
RRSP and RRIF growth generally stays tax-deferred while you're a UK resident, under Article 17 of the UK-Canada tax treaty, which taxes pension-type income only in your state of residence. This is a materially better outcome than the TFSA's treatment. Withdrawal mechanics and any Canadian withholding tax on distributions are genuinely specific to your situation, this is worth a direct conversation with a cross-border accountant before you draw anything down.
UK workplace pension auto-enrolment
Once you're employed in the UK, workplace pension auto-enrolment applies to you the same as it does to a UK national, based on where you work, not your nationality. If you're aged 22 to State Pension age and earn at least £10,000 a year, your employer must automatically enrol you into a workplace pension scheme, though you can opt out.
What to do before you move
At minimum, take stock of what's in your TFSA and RRSP before your move, and talk to a cross-border tax adviser about whether it's worth restructuring anything ahead of becoming UK tax resident, particularly for a TFSA holding significant growth assets. This is genuinely one area where planning ahead of the move matters more than sorting it out afterwards.
Key Takeaways
- TFSA growth and income become taxable once you're UK tax resident. HMRC doesn't recognise its Canadian tax-free status.
- RRSP growth generally stays tax-deferred under the UK-Canada tax treaty, a materially better outcome than the TFSA.
- UK workplace pension auto-enrolment applies to you the same as a UK national, once employed and earning above the threshold.
- Get cross-border tax advice before you move, particularly for a TFSA with meaningful growth built up.
Frequently Asked Questions
Should I close my TFSA before I move?
That's a genuine option some migrants consider, cashing out before becoming UK tax resident to lock in the Canadian tax-free treatment. Whether it's right for you depends on your specific holdings and timeline, get advice from a cross-border tax specialist rather than deciding from this article alone.
Do I need to report my RRSP to HMRC?
Foreign income and assets can trigger UK Self Assessment reporting requirements. Confirm your specific obligations with an accountant rather than assuming, since this depends on your full financial picture.
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