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Although not traditionally a popular retirement destination for foreign nationals, Canada can offer a number of benefits to retired expatriates. The standard of living is high and the cost of living significantly lower than in many other western countries, including the U.S.

The government offers tax benefits to attract new foreign residents, including exemption from income tax and capital gains tax on overseas-generated income, and there is no estate tax. There are also double taxation agreements with more than 60 countries, which prevent duplicate taxation of income. However, rates of taxation in Canada are high, so if considering a move there it is important to check your liability for taxes on your income or assets.

Canada also has social security agreements with many other countries, which allow periods of residence or social security payments made in these countries to count towards eligibility for social security benefits, including state pensions, in Canada. For those with private pension plans, contributions are tax-deductible and any investment income earned from the plans is payable tax-free.

Overseas pensions can usually be paid direct to expatriates living in Canada. However, UK nationals have their pensions frozen when they move to Canada, and do not benefit from the pension increases paid to those living in the UK and in some other countries. There is currently a campaign to change this law.

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