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The short answer
If you earn pounds or euros from UK or EU work, rent or pensions while living in Canada, you can hold them in a foreign currency account (where your bank or another provider offers one), keep an account in the UK or EU, or convert each payment to Canadian dollars. The main cost is the gap between the rate you get and the mid-market rate, plus any fee; compare against the Bank of Canada's daily rate. For tax, income is converted to Canadian dollars at the Bank of Canada rate for the day.
Why hold the currency at all
Many Nigerians in Canada have a UK or EU chapter behind them: a pension from years in London, a flat let in Dublin, freelance clients in Germany. If the money will be spent in the same currency, such as a UK mortgage, a child's fees in Ireland or a summer in Europe, converting to Canadian dollars and back costs you twice. Holding the currency avoids that. If everything is spent in Canada, converting on arrival may be simpler.
There is also a timing question. The Canadian dollar moves against the pound and the euro every day. Holding a balance lets you convert when you choose rather than on whatever day a payment lands, but it also means the Canadian dollar value of what you hold goes up and down in the meantime. Neither approach removes currency risk; holding just moves the decision to a date you pick.
Where you can hold pounds and euros
| Option | What to check |
|---|---|
| Foreign currency account at a Canadian bank | Whether your bank offers GBP or EUR accounts at all (US dollar accounts are more common), fees, and whether deposits are covered by CDIC |
| Keeping your UK or EU bank account | Whether the bank lets you keep it with a Canadian address, and any monthly fee |
| Multicurrency account with a provider | Which currencies come with local account details, how conversion is priced, and who holds the money |
| Converting each payment to CAD | The rate and fee each time; simplest if you spend only in Canada |
For deposit protection on foreign currency at Canadian institutions, see our CDIC article. For payments arriving from UK or EU payers, our guide to receiving GBP or EUR into a Canadian account covers the routing.
What converting costs
Conversion is priced in two ways, often together: a visible fee, and a margin built into the rate. The second is easy to miss. To see it, compare the rate you are offered with a reference at the same moment. The Bank of Canada publishes daily rates for both pounds and euros against the Canadian dollar each business day, which it describes as indicative only; some providers, such as Wise on its Canadian pages, say they use the mid-market rate and show their fee separately.
Worked example (illustrative figures only)
- You receive a UK pension of £1,500 a month.
- Example reference rate: CAD 1.85 per £1, so the pension is worth CAD 2,775.00.
- If your provider's rate is 2.5% below that, you receive about CAD 2,705.63, a cost of CAD 69.38 a month.
- Over a year that margin is CAD 832.50, before any fixed transfer fee.
Ask any provider for the rate it would give you at that moment and do the comparison yourself. Margins differ between providers, amounts and days, and between card payments and transfers.
The CRA side
Canadian residents report world income, so UK and EU pension, rent, interest and freelance income goes on your Canadian return in Canadian dollars. CRA Folio S5-F4-C1 says to use the Bank of Canada rate for the day the amount arises (or the closest preceding day), and may accept an average rate over a period where that is reasonable and rates have not swung sharply. Because the Bank publishes GBP and EUR rates, you can use them directly.
Two more points:
- Foreign bank accounts count towards the T1135 threshold. The CRA says you file Form T1135 if the total cost of your specified foreign property is more than $100,000 at any time in the year, and accounts held outside Canada are included.
- If UK or EU tax was deducted at source, the CRA's foreign tax credit Folio explains how a credit may reduce Canadian tax, limited to the lesser of the foreign tax paid and the Canadian tax on that income.
Keep a record of what each balance cost you in Canadian dollars and when you converted it, so your accountant can work out the tax position on any later conversion. This is information, not tax advice.
Simple rules of thumb
- Hold a currency if you will spend it in that currency within a year or so.
- Convert in larger, less frequent amounts if the fee is fixed; the margin is a percentage either way.
- Keep a log of every conversion with date, amount and rate.
- Check that any account you use outside Canada is reported where required.
Where Pryme fits
A Pryme Personal Account opened from Canada holds pounds and euros, as well as US dollars and naira, each with local account details, so a UK or EU payer can pay you in its own currency. The money stays in the currency it arrived in until you choose to Swap, with the rate shown first and the fee on its own line. See the multicurrency account.
Questions people ask
Can I have a pound or euro account at a Canadian bank?
Some Canadian banks offer foreign currency accounts; US dollar accounts are more common than GBP or EUR. Ask your bank which currencies it offers and on what fees.
What exchange rate do I use for UK income on my Canadian return?
The CRA points to the Bank of Canada rate for the day the income arose, or an average rate over a period where reasonable. The Bank publishes GBP and EUR rates.
Does a UK bank account count for Form T1135?
Yes. Foreign bank accounts are specified foreign property and count towards the $100,000 cost threshold for filing Form T1135.
How do I see the real cost of converting pounds to Canadian dollars?
Compare the rate you are offered with a reference such as the Bank of Canada's daily rate at the same time, then add any visible fee.
Sources
- Bank of Canada: Daily exchange rates (table dated 23 Oct 2026) · accessed Oct 2026
- CRA Income Tax Folio S5-F4-C1: Income tax reporting currency (updated 27 Jun 2024) · accessed Oct 2026
- CRA: Questions and answers about Form T1135 (modified 19 Oct 2026) · accessed Oct 2026
- CRA Income Tax Folio S5-F2-C1: Foreign tax credit (modified 31 Mar 2026) · accessed Oct 2026
- Wise: CAD to USD currency converter page (Canada) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.