UK Pension Transfers for Expats
A QROPS (Qualifying Recognised Overseas Pension Scheme) can allow UK pension holders living permanently abroad to transfer their pension out of the UK tax wrapper. The rules changed significantly in October 2024. This guide covers what you need to know before your introduction.
Informational only, not financial advice. QROPS transfers of defined benefit pensions above £30,000 require regulated advice.
Last reviewed: July 2026
In short
A QROPS (Qualifying Recognised Overseas Pension Scheme) is an overseas pension scheme that has met HMRC requirements, allowing UK pension holders permanently resident abroad to transfer their pension assets out of the UK tax wrapper. HMRC publishes a list of qualifying schemes (the ROPS list). Once transferred, the pension is administered under the host country rules, and HMRC retains a reporting interest for ten years. A 25% Overseas Transfer Charge applies unless specific exclusion conditions are met. Following the Autumn Budget 2024, the EEA and Gibraltar exclusion was removed from 30 October 2024, meaning the same-country residence condition is now the primary practical exclusion for most expats. An Overseas Transfer Allowance of £1,073,100 was introduced in April 2024, capping the amount that can be transferred OTC-free. QROPS is rarely suitable for US persons and is not right for everyone. Where it does fit, it puts the pension under one set of rules, in the country where you actually live.
Definition
A QROPS, or Qualifying Recognised Overseas Pension Scheme, is an overseas pension scheme that has met HM Revenue and Customs requirements, allowing UK pension holders permanently resident abroad to transfer their UK pension assets out of the UK tax wrapper and into the overseas scheme. HMRC uses the term ROPS (Recognised Overseas Pension Scheme) on its published list; the "Q" (Qualifying) prefix refers to schemes that also satisfy the additional conditions needed to receive a UK pension transfer.
Once transferred, the pension is administered under the host country rules. HMRC retains a reporting interest for ten years post-transfer. A 25% Overseas Transfer Charge (OTC) applies unless one of the current exclusion conditions is met. A new Overseas Transfer Allowance (OTA) of £1,073,100, introduced on 6 April 2024, caps the total value of QROPS transfers that can be made without triggering an additional OTC on the excess.
This is a general explanation. QROPS suitability is highly individual. Nothing on this page constitutes financial, tax, or legal advice.
Eligibility
QROPS is not appropriate for everyone. Whether it is worth exploring depends on your residency, pension type, destination country, and long-term plans. These are general indicators, not a suitability assessment. The HMRC ROPS list sets out which schemes have notified HMRC of their qualifying status; appearing on the list does not guarantee suitability for your individual circumstances.
QROPS is primarily designed for those who have left the UK permanently or on a long-term basis. The same-country residence rule means you generally need to be resident in the country where the QROPS is registered for the transfer to fall outside the 25% OTC.
Individuals with deferred UK defined benefit or defined contribution pensions who now live and plan to retire abroad may find a QROPS simplifies cross-border administration and settles the pension in the currency they actually spend in, where a GBP SIPP leaves a sterling mismatch to manage.
Where your expected retirement income and expenses are in a non-GBP currency, a QROPS denominated in that currency can align the pension with the currency you actually spend in. Local tax treatment of drawdown is a key factor a regulated specialist will model.
US citizens and green card holders face significant additional complexity with QROPS due to IRS foreign trust classification and PFIC rules. For most US persons, a SIPP is the more appropriate structure. Specialist US-UK cross-border advice is essential.
Those who have been non-UK resident for a sustained period and have no firm plans to return are more likely to find a QROPS structure worth exploring. Returning to the UK within five full UK tax years following a transfer can trigger the OTC retrospectively.
Defined benefit pension transfers above £30,000 require regulated financial advice by UK law before a transfer can proceed, regardless of where you live. Pharos Introductions can connect you with a regulated specialist experienced in cross-border pension work, who will confirm the permissions your particular transfer requires.
Overseas Transfer Charge
The OTC is a 25% HMRC tax charge applied at source to QROPS transfers that do not meet an exclusion condition. It was introduced in 2017. At the Autumn Budget 2024, the Government removed the exclusion for transfers to QROPS established in the EEA and Gibraltar, with effect from 30 October 2024 (per HMRC PTM102300). The remaining exclusion conditions are:
Same-country residence
The member is resident in the same country as the country where the QROPS is established at the time of transfer. For example, a member living in Malta transferring to a Malta QROPS. This is the most commonly applicable exclusion.
Occupational pension scheme
The QROPS is an occupational pension scheme and the member is an employee of a sponsoring employer under that scheme at the time of transfer.
Overseas public service scheme
The QROPS is a scheme equivalent to a UK public service pension scheme and the member is employed at the time of transfer by an employer that participates in the scheme.
International organisation scheme
The QROPS is established by an international organisation to provide benefits in respect of past service as an employee of that organisation.
Retrospective charge (the five-tax-year rule)
Even if a transfer was initially OTC-free, moving to a different country within five full UK tax years following the transfer can trigger the OTC retrospectively. HMRC can apply the charge if you no longer meet the exclusion condition that applied at transfer. Country selection at transfer time is therefore critical.
October 2024 change: what it means in practice
Before 30 October 2024, a UK expat living in France could transfer to a Malta QROPS without the OTC, because both Malta and France are EEA countries. That EEA exclusion no longer exists. From 30 October 2024, an expat living in France who transfers to a Malta QROPS will generally face the 25% OTC unless one of the remaining exclusion conditions applies. Only a same-country transfer (French resident to a French QROPS, for instance) or an occupational or public service scheme transfer would fall outside the charge. Transfers where a substantive request had been made to the scheme before 30 October 2024 could still use the now-removed EEA exclusion under HMRC's transitional provisions.
The OTC can be refunded by HMRC in some circumstances, for example if you satisfy the relevant exclusion condition after the event, but the process is complex. A regulated specialist will model OTC exposure as part of any QROPS suitability assessment. For the full technical conditions see HMRC's Overseas Transfer Charge guidance.
Overseas Transfer Allowance
When the Lifetime Allowance (LTA) was abolished on 6 April 2024 under the Finance Act 2024, a new Overseas Transfer Allowance (OTA) was introduced specifically for QROPS transfers. The OTA sets a limit on the total value of QROPS transfers that can be made without triggering an additional Overseas Transfer Charge on the excess.
The OTA is equal to an individual's lump sum and death benefit allowance, set at £1,073,100. This is the same figure as the former LTA. If the total value of your QROPS transfers exceeds your available OTA, the excess is subject to the 25% OTC even if a residency exclusion would otherwise apply. Per HMRC guidance on the abolition of the Lifetime Allowance.
Your available OTA is reduced by 100% of any LTA you used before 6 April 2024. If you crystallised significant pension benefits before LTA abolition, your available OTA may be materially reduced, limiting how much you can transfer OTC-free. A regulated specialist will calculate your remaining OTA before any transfer proceeds.
For most expats with modest pension pots, the £1,073,100 OTA is not a binding constraint. For those with larger pension funds or multiple schemes, staying within the OTA limit is an important planning consideration. Transfers across multiple tranches each use up OTA.
The OTA operates as a second gate alongside the exclusion conditions. A transfer must both meet an exclusion condition (same-country residence etc.) and stay within available OTA to be fully OTC-free. If either gate is missed, the 25% charge or the excess charge applies.
OTA figures are based on HMRC guidance current as of July 2026. The OTA amount is set by statute and may change in future Budgets. Always verify with a regulated specialist before any transfer.
Comparison
Neither structure is universally superior. The right choice depends on your jurisdiction, tax position, currency, long-term plans, and whether the April 2027 pension-IHT change is relevant to your situation. This table is a factual summary, not a recommendation.
| Factor | SIPP | QROPS |
|---|---|---|
| Registered in | United Kingdom | Overseas (country-specific) |
| UK tax wrapper | Yes, HMRC rules apply | No, host country rules apply |
| OTC charge risk | None | 25% if exclusion conditions not met |
| OTA limit applies | No | Yes, £1,073,100 cap on OTC-free transfers |
| April 2027 pension-IHT | In scope from April 2027 | Not in scope (overseas scheme) |
| US persons suitability | Generally yes (treaty) | Rarely suitable (PFIC / foreign trust) |
| Currency | GBP | Host country currency (or multi) |
| Regulated advice required | DB > £30k: yes | DB > £30k: yes |
| HMRC reporting window | Ongoing | 10 years post-transfer |
| Drawdown age (2026) | Age 55, rising to 57 in April 2028 | Varies by scheme and jurisdiction |
| Local tax on drawdown | UK income tax (for most) | Host country income tax rules |
| Portugal-based scheme | Available option | No Portuguese scheme on the ROPS list at review date |
This comparison is illustrative and simplified. Tax rules, drawdown ages, OTA limits, and scheme terms vary. It is not financial advice. Rules current as of July 2026.
Situations commonly considered
These are general situations where one structure or the other is more commonly considered, not a guide to what suits your circumstances. A regulated specialist will assess your situation in full.
April 2027 Pension-IHT Change
The Finance Act 2026 is law. From April 2027, undrawn pension funds held within UK-registered pension schemes, including SIPPs, will fall within the scope of inheritance tax. This is a confirmed change, not a proposal.
From April 2027, the value of an undrawn SIPP held on death will typically form part of the deceased's estate for IHT purposes. Depending on total estate value, inheritance tax of up to 40% can apply to the part of the estate above the available allowances, and from April 2027 the undrawn pension forms part of that estate.
Once a UK pension has been transferred to a QROPS, it is no longer a UK-registered pension scheme. The April 2027 UK IHT rules apply to UK-registered schemes, not to QROPS funds. However, that does not put a QROPS beyond estate taxation: the host country's succession and estate tax rules will apply instead, and these vary significantly by jurisdiction.
The April 2027 change is a material planning consideration but not a standalone reason to transfer to a QROPS. Transferring in response to the UK IHT change while incurring the 25% OTC would rarely leave a family better off. A regulated specialist will weigh the IHT change alongside OTC exposure, local succession taxes, drawdown tax treatment, currency, and your personal circumstances.
Model your pension IHT exposure
Our pension-IHT projection tool lets you model the potential inheritance tax on an undrawn pension under the April 2027 rules. It does not give advice, but it makes the liability visible before your introduction.
Open pension-IHT projection toolHow we help
The right specialist turns a QROPS decision from a rules problem into a plan: the charge position modelled before anything moves, the currency matched to where you will spend, and the succession position understood in the country you live in. Pharos connects you with regulated specialists who work in cross-border pension planning and know the OTC, OTA and local tax rules that apply where you live. Pharos is an introducer and does not give QROPS advice.
Because Pharos introduces rather than advises, we are not tied to any QROPS provider or jurisdiction. The regulated specialist we match you with sets out what fits your circumstances, and that judgement is theirs, not ours.
Tell us your location, pension type, and what you need. Short form. No advice given.
We review every submission before any introduction is considered. We then identify a regulated specialist with QROPS experience in your jurisdiction.
We connect you directly. No auto-forwarding, no pressure. The regulated advice conversation happens on your terms.
QROPS or SIPP
Further reading
This page covers the core rules. The articles below explore specific aspects of QROPS in more detail.
QROPS explained: UK pension transfers abroad
A detailed walkthrough of how a QROPS transfer works, step by step.
The Overseas Transfer Charge: rules and exemptions
The 25% charge, the October 2024 changes, and the five-tax-year tail explained in full.
How to choose a QROPS specialist
What permissions and experience to look for in a cross-border pension adviser.
Questions
A QROPS (Qualifying Recognised Overseas Pension Scheme) is an overseas pension scheme that has met HMRC requirements, allowing UK pension holders living permanently abroad to transfer their pension assets out of the UK tax wrapper and into the overseas scheme. HMRC publishes a list of schemes that have notified it of their qualifying status (called the ROPS list). Once transferred, the pension is administered under the host country rules, and HMRC retains a reporting interest for ten years post-transfer. A 25% Overseas Transfer Charge can apply if the transfer does not meet one of the current exclusion conditions.
Eligibility depends on both your personal circumstances and the specific QROPS you are considering. Generally, you must be permanently resident outside the UK at the time of transfer. Not all QROPS schemes accept all nationalities or residents. A Malta-based QROPS, for example, may have different eligibility rules to an Australian superannuation scheme that meets the QROPS criteria. Regulated advice is required for any defined benefit pension transfer above £30,000, regardless of your country of residence.
The Overseas Transfer Charge (OTC) is a 25% HMRC tax charge applied to QROPS transfers that do not meet an exclusion condition. It was introduced in 2017. Following the Autumn Budget 2024, the EEA and Gibraltar exclusion was removed with effect from 30 October 2024. The remaining exclusions are: (1) the member is resident in the same country as the QROPS at the time of transfer; (2) the QROPS is an occupational pension scheme and the member is an employee of the sponsoring employer; (3) the QROPS is an overseas public service scheme and the member is employed by a participating employer; or (4) the QROPS is established by an international organisation for its former employees. A retrospective charge can also apply if you move country within five full UK tax years following a transfer that was initially free of the charge. Per HMRC guidance at gov.uk/guidance/overseas-transfer-charge.
The Overseas Transfer Allowance (OTA) was introduced on 6 April 2024 when the Lifetime Allowance (LTA) was abolished. It sets a limit of £1,073,100 (equal to the former LTA) on the total value of QROPS transfers that can be made without triggering an additional Overseas Transfer Charge on the excess. If your total transfers to QROPS exceed your available OTA, the excess is subject to the 25% OTC regardless of whether a residency exclusion applies. Your available OTA is reduced by 100% of any LTA you used before 6 April 2024. Per HMRC guidance on the abolition of the Lifetime Allowance.
A SIPP (Self-Invested Personal Pension) is a UK-registered pension scheme and remains subject to UK pension rules, including HMRC reporting requirements and UK income tax on drawdown for some recipients. A QROPS is an overseas scheme; once transferred, it is typically administered under the rules of the host country. For some long-term non-UK residents a QROPS may offer a simpler cross-border structure; for others, particularly US persons or those who may return to the UK, a SIPP is usually more appropriate. The right choice depends on individual circumstances, which a regulated specialist can assess.
Under the Finance Act 2026, UK-registered pension funds will fall within the scope of inheritance tax from April 2027. This applies to undrawn pension pots held within UK-registered schemes, including SIPPs. Once a pension has been transferred to a QROPS, it is no longer a UK-registered pension, so the April 2027 IHT rules will not apply to the transferred fund directly. However, local succession and estate taxes in the host country will govern what happens to QROPS funds on death, and these can be as or more complex than UK IHT. This distinction is one factor a regulated specialist will consider when assessing whether a transfer is suitable. You can model the potential UK IHT exposure on an undrawn pension using our pension-IHT projection tool at /tools/pension-iht-projection.
QROPS transfers are rarely suitable for US citizens or permanent residents (green card holders). The IRS typically classifies QROPS as foreign trusts rather than pension plans, and the investments held within a QROPS are frequently subject to Passive Foreign Investment Company (PFIC) rules. PFIC classification can result in punitive tax treatment on gains and income. The US Treasury and IRS have also identified certain Maltese pension transactions as listed transactions subject to enhanced scrutiny. For most US persons, retaining the UK pension in a SIPP is the more appropriate approach, as the US-UK tax treaty recognises UK registered pension schemes, which include SIPPs. Specialist cross-border US-UK tax advice is essential before any decision is made.
HMRC publishes and regularly updates a list of schemes that have notified it of their status as Recognised Overseas Pension Schemes (ROPS). The list is available at gov.uk/government/publications/qualifying-recognised-overseas-pension-schemes-qrops. Schemes can be added or removed at any time if they no longer meet HMRC requirements. Appearing on the ROPS list does not guarantee suitability for your circumstances; it simply means the scheme has met the qualifying criteria. A regulated specialist will confirm current list status and suitability as part of any transfer assessment.
Choosing a QROPS provider involves assessing the jurisdiction of the scheme, the investment options it offers, charges, currency denomination, how it interacts with local tax rules in your country of residence, and whether the provider is financially stable and well-regulated in its home country. Because Pharos introduces rather than advises, we are not tied to any QROPS provider or jurisdiction. The regulated specialist we match you with will set out which scheme fits your specific circumstances, and that judgement is theirs, not ours.
Yes, if your defined benefit pension (or safeguarded benefits) has a transfer value above £30,000, UK law requires you to take regulated financial advice from a regulated specialist before the transfer can proceed. This applies even if you are resident abroad. Pharos Introductions can introduce you to a regulated specialist who will confirm how that statutory requirement applies to your transfer and what is needed to satisfy it. We do not provide advice ourselves. For defined contribution pensions without safeguarded benefits the regulated advice requirement does not apply, but specialist input is worth having given the complexity of QROPS rules.
HMRC publishes a list of QROPS schemes that have notified it of their qualifying status. Countries with significant QROPS provision include Malta, Gibraltar, Guernsey, Isle of Man, New Zealand, Hong Kong, and Australia (via superannuation). Since the removal of the EEA and Gibraltar exclusion from the Overseas Transfer Charge in October 2024, transferring to a Malta or Gibraltar QROPS while resident in a different country will generally attract the 25% OTC unless you are resident in Malta or Gibraltar respectively. The availability, suitability, and cost of QROPS schemes varies significantly by country. A regulated specialist will confirm the current status and suitability of any specific scheme.
More questions? Visit our full FAQ or read our guide to finding an expat financial adviser.
Sources
Last reviewed July 2026. Rules are current as of the review date. HMRC can amend QROPS rules at any time; verify all technical details with a regulated specialist before any transfer. External sources open in a new tab.
Keep exploring
A pension matched to where you now live is one less thing your family has to unpick later: income in the right currency, the OTC and OTA position settled before anything moves, and one specialist who has seen the whole picture. We review every submission before any introduction is considered, and we introduce you to a regulated specialist working in your jurisdiction. No auto-forwarding, no obligation.