RRSP for Non-Residents of Canada 2025

Millions of Canadians have accumulated significant Registered Retirement Savings Plan (RRSP) balances over their working years. When they leave Canada and become non-residents, the RRSP does not disappear — but the rules change significantly. This guide explains what happens to your RRSP as a Canadian non-resident in 2025.

Can Non-Residents Keep Their RRSP?

Yes. Becoming a non-resident of Canada does not force you to close or collapse your RRSP. You can maintain your existing RRSP indefinitely as a non-resident. The RRSP is exempt from the deemed disposition rules that apply to other assets when you leave Canada — it is not treated as if you sold it on your departure date.

RRSP Contributions as a Non-Resident

Once you become a non-resident, you generally cannot make new RRSP contributions and receive a deduction. You cannot generate new RRSP contribution room because contribution room is based on earned income reported on Canadian tax returns — which non-residents typically do not have (unless they have Canadian-source earned income).

If you contribute to your RRSP as a non-resident — using leftover contribution room from when you were a resident — those contributions are subject to a 25% non-resident tax on the amount contributed. This makes additional contributions while a non-resident generally a bad idea. Confirm with a tax professional before contributing.

RRSP Withdrawals as a Non-Resident

When you withdraw from your RRSP as a non-resident, Canada withholds non-resident withholding tax on the gross withdrawal amount. The withholding rate depends on the amount and whether a tax treaty applies:

Scenario	Withholding Rate
No tax treaty (default)	25% on all withdrawals
Canada-US Treaty (lump sum)	25% if lump sum over certain threshold
Canada-US Treaty (periodic payments)	15% if structured as periodic payments
Canada-UK Treaty	25% standard; periodic may be lower
Other treaty countries	Varies — check specific treaty

The Canada-US Treaty Benefit for RRSP Withdrawals

Under the Canada-US Tax Treaty, RRSP withdrawals made by Canadians living in the US may be subject to a reduced withholding rate if the withdrawals qualify as periodic annuity-type payments. However, the rules for what qualifies as "periodic" are strict — regular periodic payments from a converted RRIF may qualify, while lump-sum withdrawals typically face the full 25% rate.

Strategy tip for Canada-US snowbirds and expats: Converting your RRSP to an RRIF (Registered Retirement Income Fund) before or after becoming a US resident and taking regular minimum RRIF payments may qualify for the 15% treaty withholding rate rather than 25%. This requires careful planning and professional advice.

Tax Treatment in Your New Country

In addition to Canadian withholding tax, you may owe tax on RRSP withdrawals in your country of residence. The treatment varies:

United States: Under the Canada-US Treaty (Article XVIII), US residents can generally elect to defer US tax on income accruing in an RRSP until withdrawal. However, there is a reporting requirement — you must file IRS Form 8891 (now superseded) or make an annual election on Form 1040. Failure to file has historically caused problems for Canadians in the US.
UK: The Canada-UK Treaty has provisions for pension income. UK tax treatment should be confirmed with a UK/Canadian cross-border advisor.
Other countries: Many countries do not recognize the RRSP as a pension fund and may tax the annual accrual of gains inside your RRSP even before withdrawal. Seek country-specific advice.

Converting RRSP to RRIF as a Non-Resident

You can convert your RRSP to an RRIF as a non-resident. RRIF minimum withdrawals will be subject to the same non-resident withholding tax as RRSP withdrawals. Converting to an RRIF may allow you to benefit from the lower treaty withholding rates available on periodic annuity payments in certain tax treaties.

Can You Leave Your RRSP Invested?

Yes — you can leave your RRSP invested and growing without withdrawals for as long as you wish. The growth inside the RRSP is sheltered from annual Canadian tax even as a non-resident. However:

You must convert to an RRIF or annuity by the end of the year you turn 71 — this rule applies regardless of residency
Your RRSP financial institution will want to know your non-resident status for compliance purposes
Some Canadian institutions restrict services to non-residents, and you may need to find one that continues to service non-resident RRSP accounts

Spousal RRSPs

If you have a Spousal RRSP and your spouse becomes a non-resident, the same rules apply. The attribution rules (where withdrawals within 3 years are attributed back to the contributing spouse) continue to apply even after becoming a non-resident if the contributions were made while resident in Canada.

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Key Points for Non-Resident RRSP Holders

You can maintain your RRSP as a non-resident — no forced closure
Withdrawals face 25% withholding tax (reduced by treaty, e.g., 15% for periodic payments under Canada-US treaty)
Do not make new contributions as a non-resident — 25% tax applies
In the US, RRSP accrual can be deferred under treaty — but ensure proper reporting
Seek professional advice before making large RRSP withdrawals as a non-resident — the interplay of Canadian withholding, foreign income tax, and treaty provisions requires careful analysis