QROPS Explained: Transferring a UK Pension Overseas

QROPS stands for Qualifying Recognised Overseas Pension Scheme. It is a pension scheme based outside the UK that meets a set of conditions laid down by HMRC, which allows it to receive a transfer from a UK-registered pension without that transfer automatically being treated as an unauthorised payment. HMRC publishes a "Recognised Overseas Pension Scheme notification list" (the ROPS list) of schemes that have told HMRC they meet the conditions — but being on the list is not a guarantee: the responsibility for meeting the rules stays with the scheme, and a scheme can be removed at any time.

That is why the receiving scheme must be a QROPS at the point your transfer actually completes. Transferring to a scheme that is not a QROPS can make the whole transfer an unauthorised payment, taxed heavily. Because a QROPS transfer is a form of pension transfer, many of the same principles in our article on defined benefit pension transfers apply — in particular, if you are giving up safeguarded benefits worth more than £30,000 you are legally required to take regulated advice first.

The biggest change in recent years is to the Overseas Transfer Charge (OTC), a 25% tax charge on transfers to a QROPS. Until late 2024, transfers to a QROPS based in the European Economic Area (EEA) or Gibraltar were excluded from the charge for people living in the UK or the EEA. From 30 October 2024 that exclusion was removed.

The test is now much simpler and much stricter: the 25% charge does NOT apply only if you are tax-resident in the same country in which your QROPS is established. If you live in a different country from your QROPS, the 25% charge applies to the transfer. So, for example, moving a UK pension to a Malta-based QROPS while living in France would now trigger the charge, where an EEA-based transfer might previously have escaped it. HMRC's guidance on the overseas transfer charge on gov.uk sets out the exact conditions, and because the charge is deducted at the point of transfer, it is not something you can easily reclaim later.

Since 6 April 2024, when the Lifetime Allowance was abolished, QROPS transfers are tested against a separate limit called the Overseas Transfer Allowance (OTA). For 2026/27 the OTA is £1,073,100. Where the 25% Overseas Transfer Charge does not otherwise apply, the amount you transfer is measured against your available OTA, and any excess above it is subject to a 25% charge.

Your available allowance can be lower than the headline figure if you used up Lifetime Allowance before April 2024 or made earlier transfers to a QROPS. This is a technical calculation, and it interacts with the tax-free cash limits explained in our article on pension tax-free cash. For larger pensions in particular, checking the OTA position before transferring is essential.

A common misconception is that once your pension is in a QROPS it is outside UK rules. That is not the case for a long time. For funds transferred on or after 6 April 2017, the UK "member payment provisions" continue to apply for ten full UK tax years after the date of transfer, regardless of where you live — and the QROPS must report payments to HMRC throughout that period.

If you take money out of the QROPS in a way that would not have been allowed under UK rules during those ten years, HMRC can treat it as an unauthorised payment and levy UK tax charges. Only once you have been non-UK resident for the whole relevant period do the UK reporting requirements fall away. Our article on how pension withdrawals are taxed in the UK explains the domestic rules that a QROPS is measured against.

A QROPS is not automatically better or worse than keeping a UK pension — it depends entirely on your circumstances, your country of residence, and your plans. For some people settled permanently in a country with a suitable local QROPS, it can simplify currency and estate matters. For many others, the 25% charge, the ongoing UK rules, the costs, and the loss of UK regulatory protections mean a UK-based option is more sensible — which is why some expats instead keep or consolidate a UK pension, or later bring an overseas pension home, as our companion articles on transferring a QROPS back to the UK and tax on overseas pensions in the UK discuss.

Given the complexity — and that mistakes are often irreversible — this is firmly an area where regulated advice may be appropriate, and you can check an adviser's status using the steps in our guide to verifying a financial adviser is FCA authorised.