Transferring Money to Canada

You’re planning on sending money to Canada, and you’re so very glad that you live in this time, where it’s as easy as it’s ever been. We’ve come a long way from burying all your money and sending a treasure map to your nearest and dearest.

Transferring money today is a much simpler business, but there are still longer, more expensive options, and quicker, more affordable ones.

On this page, we’ll guide you through everything you need to know about sending money from the UK to Canada, including typical costs, useful tips, and the best ways to do it.

What’s on this page?

01 | How to transfer money from the UK to Canada
02 | The best way to move money
03 | How much does it cost?
04 | How long does it take?
05 | Minimum and maximum limits
06 | Tax implications
07 | What keeps my money safe?
08 | What next?

An autumnal view of Montreal, one of the Canadian cities you may want to send money to

How to transfer money from the UK to Canada

To send cash on its way to someone in Canada, you don’t need to use the services of a bank. It’s only one of your options.

These days, there are usually three options to choose from: banks, P2P (peer-to-peer) currency exchange platforms, and foreign exchange brokers.

Allow us to take you through each one.

Transferring money with a bank

This is the traditional option. You can send an international wire transfer from one bank to another through the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network.

The SWIFT network comprises more than 10,000 banks in 200+ countries, so it’s certainly wide-ranging.

However, it’s also an expensive choice. There are usually several fees associated with SWIFT transfers, such as those charged by the sender and recipient banks, along with any charged by the intermediary banks.

Unless the sender and recipient banks have a strong relationship with one another, there can be up to three intermediary banks involved – which is a lot.

After all, banks typically apply a mark-up to the exchange rate, which is usually around 4-6% above the mid-market rate (the one you see on Google). 

There’s more info on fees further down the page.

Transferring money with a P2P currency exchange platform

In the past decade, the arrival of internet-based peer-to-peer foreign currency exchange platforms has radically changed the market. 

These platforms are generally much cheaper than the service offered by banks, mainly because they use the real, mid-market exchange rate, and charge very low fees.

In 2019, The Daily Telegraph reported that the exchange rates used by P2P platforms were on average 4% cheaper than those used by banks.

Importantly, these companies also offer a strong level of security. Every responsible P2P platform operating in the UK is authorised and regulated by the Financial Conduct Authority (FCA). 

These services are called “peer to peer” because they match you with someone else around the world.

For example, if you’re looking to send £100 to Canada, a company like Wise (formerly TransferWise) will find someone who’s looking to send around C$170 to the UK, and use this pairing to fulfil the exchange. 

If they can’t find anyone to match your transfer request, P2P platforms will simply buy the currency from the usual interbank markets – although this can then make the transfer more expensive.

That’s why exchanges in very common currencies (e.g. dollars, pounds, euros, and yen) are so cheap on P2P platforms, because there’s always demand on both sides. Users literally trade between themselves without any dealers getting involved.

Transferring money with a foreign exchange broker

Foreign exchange (FX) brokers are useful if you’re sending very large sums of money abroad, i.e. over £3,000. They charge fees for their services, but will typically waive (or reduce) these fees for larger transfers.

FX brokers also add a mark-up to the exchange rate, but this is typically much smaller than the mark-up usually applied by banks. 

The key benefit of using an FX broker is the ability to set up a forward contract. This means you can set up future international money transfers with today’s exchange rate, so you won’t be affected by any negative changes.

The best way to move money from the UK to Canada

This depends on how much you’re sending, when you need it to arrive by, and how much you’re willing to pay in fees. 

It’s ultimately up to you, and we absolutely recommend you talk to a qualified tax professional before you make a decision.

However, for an easy-to-use service that’s quick and good value for money, look no further than Wise (formerly TransferWise).

This mother bear and her cubs have little use for money 

How much does it cost to send money to Canada?

It varies, based on what service you’re using, how much money you’re sending, and how you’re paying for it.

If you use banks to send an international wire transfer, you’ll be dealing with a marked up exchange rate and a sending fee, while your recipient will have to pay a receiving fee.

According to research by Finder in May 2020, you can expect UK banks to charge up to £40 as a sending fee for an international money transfer, and up to £7.50 as a receiving fee.

Meanwhile, on average, banks add a 4% mark-up to the mid-market exchange rate. 

In contrast, P2P currency exchange platform Wise’s fees for sending pounds to Canada currently range from a 1.02% fee on transfers of £100, to a 0.32% fee on transfers of £624,084 or more.

Wise also states that any transfers to Canada under £145,000 should arrive at their destination by the end of the next day.

It also depends on how you pay for the transfer. For example, using a business debit card to transfer pounds with Wise incurs a 0.69% fee, while a credit card incurs a 2.45% fee.

Find out today how much it’ll cost you to use Wise.

Cheapest way to transfer money from UK to Canada

In most cases, you’ll find the best rate with P2P foreign currency exchange firms, as they don’t tend to apply any mark-up to the mid-market rate. 

For example, depending on the variables, Wise’s service can be up to 8x cheaper than the service offered by high street banks. 

However, if you plan to send large amounts of money to Canada at regular intervals, a forward contract with an FX broker will probably offer you the best value.

How long does it take to send money to Canada?

Again, there’s a bunch of variables at play which can affect the length of time it takes to send pounds to Canada. These include:

• The service you’re using 
• The number of banks involved (SWIFT transfers can involve up to three intermediary banks)
• Whether the transfer falls on a weekend or public holiday

In general, the standard length of time for any international money transfer is between 0-5 business days, with banks generally taking longer than P2P platforms.

For instance, if you send money to Canada through NatWest, a standard transfer will take 2-4 working days.

Or if you choose to transfer money to Canada with HSBC, it’ll “normally take up to four working days”.

In contrast, sending money abroad via P2P exchange platforms like Wise is typically much quicker.

For example, if you send £10,000 from the UK to Canada via Wise, it’ll usually be in your recipient’s account by the next day.

And if you change your Wise payment method from a wire transfer to a debit card, you can cut down the time it takes even further.

It rarely if ever takes as long as an international wire transfer, because there are no intermediary banks involved.

Discover today how quickly you can transfer money with Wise.

Minimum and maximum limits for Canadian money transfers

When it comes to maximum and minimum limits, there’s usually a bit of a trade-off between banks and P2P platforms.

Generally speaking, you pay higher fees to send cash via banks, but you can send larger amounts of cash; meanwhile P2P platforms keep fees low, but also impose smaller limits on how much you can send.

For example, Wise allows transfers of no more than £10,000 per day (if paying via debit or credit card), whereas HSBC allows you to send up to £50,000 online, and as much as you want from a branch.

However, if you’re not looking to send vast sums of money abroad, P2P foreign exchange firms also come with very favourable rules for minimum payments.

Wise simply requires you to transfer at least C$0.01, while services such as Western Union require a minimum payment of just £1.

While some banks also do not impose a minimum limit on payments, their large flat fees can make small transfers rather uneconomical.

Tax implications of transferring money to Canada from the UK

Alison Hill, private client tax partner at PwC, told us: “Most of the time, transferring funds from the UK to Canada is not going to have any immediate tax implications.

“If the funds are already in the UK, then the actual act of transferring them and supplying money to someone in Canada shouldn’t have any tax implications”.

However, Hill explained that “if you’re making gifts to individuals, you do need to be aware of your wider inheritance tax position. If you die within seven years of making a gift, the funds you have sent may still be considered part of your estate, and may be taxable upon your death. 

“There would be other UK tax considerations if you continued to benefit from the funds gifted and / or the gift was to a Canadian trust or company.” 

If you are sending more than CAD$10,000 to Canada, the recipient bank will report the transfer to the Canadian authorities – normally to ensure that it complies with anti-money laundering regulations and to ensure that it is reported correctly for tax purposes.

Please be advised that while every effort is made to keep this information up to date, Movehub does not provide tax advice, and you should always consult a tax professional about your unique circumstances.

What keeps my money safe when I send it to Canada?

There are governing bodies in the UK and Canada whose job it is to ensure that every bank and P2P currency exchange platform is operating responsibly, so that every customer’s money is protected.

Money transfer safety measures in the UK

All P2P currency exchange firms with registered offices in the UK are administered by HMRC, so they’re compelled to follow all UK Money Laundering Regulations. 

Plus, as ‘payment institutions’, all money transfer firms are monitored by the Financial Conduct Authority. Before sending your money with any currency exchange company, you should check to see if they’re on the FCA register.

Money transfer safety measures in Canada

All money transfers over C$10,000 (£5,800) must be reported to the government-run Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

FINTRAC combats money laundering and the funding of terrorist activities by maintaining the integrity of Canada’s financial system.

Banks and money transfer companies generally take care of this, but still, be sure to ask the company you’re using whether they’re filing a report.

Your transfer may also be reported even if it’s under C$10,000, if your company deems it suspicious.

Bank details required to transfer money to Canada

You’ll need banking details, as well as a few other pieces of information, to carry out a money transfer from the UK to Canada. Here they are:

• Your name, address, and banking details, including your account number
• The reason for the money transfer
• Your recipient’s full name, address, financial institution number, branch transit number, bank name, and account number

What next?

You should now be much more knowledgeable about how to transfer money from the UK to Canada. As you can see, there are multiple options available to you, and they each come with their own benefits.

If you’re tempted by a P2P foreign currency exchange platform, look no further than Wise.