Canada will withhold 25% of the RRSP payment at source. Unfortunately the withholding rate is not reduced by the Canada-UK tax treaty. Only when the payment is a “periodic pension payment” (RRIF or annuity) will the withholding rate be reduced to 0%.
If the $10,000 is more than 90% of your total worldwide income you could file a s.217 Canadian tax return to try and recover some of the 25% withholdings.
Hope that helps
Phil Hogan, CA
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