QROPS Explained 2026: How Overseas Pension Transfers Work

A QROPS, a Qualifying Recognised Overseas Pension Scheme, is an overseas pension arrangement that meets conditions set by HMRC and can therefore receive a transfer from a UK pension. For some people living abroad it offers a way to hold retirement savings closer to home. Since the October 2024 Budget, however, the tax charge on transfers has widened considerably, so the case for a QROPS is narrower than it once was.

In short

• A QROPS is an overseas scheme on HMRC's recognised list that can accept a UK transfer.
• Always check the scheme appears on the HMRC ROPS notification list before transferring.
• A 25% Overseas Transfer Charge may apply unless an exclusion is met.
• Since 30 October 2024 the EEA and Gibraltar exclusion has been removed.
• QROPS carry reporting obligations to HMRC for several years after transfer.

What a QROPS is, and is not

A QROPS is a pension scheme based outside the UK that HMRC recognises as broadly equivalent to a UK scheme. It is not a tax loophole and not an offshore investment scheme in disguise. Receiving a transfer does not by itself remove UK tax consequences, and a scheme appearing on the recognised list is HMRC acknowledging a notification, not endorsing the scheme. Confirming a destination is on the published ROPS list at the time of transfer is essential, because schemes drop on and off it.

The Overseas Transfer Charge

The Overseas Transfer Charge is a 25% tax on the amount transferred to a QROPS, unless an exclusion applies. The most common exclusion is that the member is tax resident in the same country as the QROPS. Narrow exclusions also exist where the scheme is an occupational scheme of the member's employer, an overseas public service scheme, or an international organisation's scheme.

The October 2024 change you must know

Before 30 October 2024, transfers to a QROPS based in the European Economic Area or Gibraltar were excluded from the charge regardless of where the member lived. That exclusion was removed for transfers made on or after 30 October 2024. Now the charge applies to such transfers where the member is UK resident or resident in a different country from the QROPS. This single change has brought many previously charge-free transfers, for example to Malta or Gibraltar based schemes, within the 25% charge.

Reporting obligations after transfer

A QROPS transfer is not the end of the relationship with HMRC. Scheme managers must report certain payments and events to HMRC, and the Overseas Transfer Charge can be triggered retrospectively if your circumstances change within a set period after the transfer, for example if you move to a country that breaks an exclusion. These ongoing obligations are part of why a QROPS suits relatively few people now.

FAQ

What is a QROPS?

A Qualifying Recognised Overseas Pension Scheme is an overseas pension that meets HMRC conditions and can receive a UK pension transfer. It must appear on HMRC's recognised list.

Will I pay the Overseas Transfer Charge?

A 25% charge applies unless an exclusion is met, most commonly being tax resident in the same country as the QROPS. Since 30 October 2024 the old EEA and Gibraltar exclusion no longer applies.

How do I check a scheme is a genuine QROPS?

Check HMRC's recognised overseas pension schemes notification list at the time of transfer. Listing means a notification was made, not that HMRC endorses the scheme.

Are there ongoing obligations after a QROPS transfer?

Yes. Scheme managers report to HMRC, and the charge can apply retrospectively if your circumstances change within a set period after the transfer.

Is a QROPS right for most expats?

For many it is not necessary, especially where a UK SIPP can be retained. The widened charge since October 2024 has narrowed the cases where a QROPS helps.