Transferring a UK pension to a QROPS: the 25% overseas transfer charge

Moving a UK pension to a QROPS can cost 25% tax. Who is exempt since 30 October 2024, the £1,073,100 allowance and the relevant-period rule.

Pensions & Retirement
Personal
UK-wide

The short answer

You can move a UK pension to an overseas scheme only if it is a qualifying recognised overseas pension scheme (QROPS). The transfer is taxed at 25% (the overseas transfer charge) unless an exclusion applies, and the main one is that you live in the same country as the QROPS. Since 30 October 2024 a QROPS in the EEA or Gibraltar no longer escapes the charge just because of where it is. Even when an exclusion applies, anything above your overseas transfer allowance (£1,073,100 as standard) is taxed at 25%. And if you move country within the "relevant period" after the transfer, the charge can arise then (GOV.UK; Finance Act 2004 ss.244AC to 244JA).

What a QROPS is, and why it matters

A "recognised transfer" out of a UK registered pension scheme is a transfer to another registered scheme or to a QROPS (FA 2004 s.169(1)). To be a QROPS an overseas scheme has to meet the recognised overseas pension scheme (ROPS) conditions, and its manager has to notify HMRC and give undertakings (PTM112100).

Transfer to anything else and the tax is heavier. GOV.UK says that if the scheme is not a QROPS your UK scheme may refuse the transfer, or you will pay at least 40% tax on it. In law it is an unauthorised payment, charged at 40% (FA 2004 s.208(5)), with a possible surcharge on top.
The ROPS list is not a guarantee. HMRC publishes a list of schemes that have told it they meet the ROPS conditions, updated on the 1st and 15th of each month, and says: "We cannot guarantee these are ROPS or that any transfers to them will be free of UK tax" (ROPS notification list). HMRC's manual adds that a letter with a QROPS number is not confirmation either, and that checking the scheme is your responsibility, not your UK administrator's (PTM102000).
Not every country's schemes can take a transfer. HMRC understands that US "qualified" plans, including IRAs, cannot accept a transfer from a registered pension scheme (PTM102000).

When the 25% charge does not apply

The charge arises on a transfer to a QROPS unless an exclusion in sections 244B to 244H applies (s.244AC). For transfers requested on or after 30 October 2024, HMRC lists four exclusion conditions (PTM102000):

You live in the country where the QROPS is established (s.244B). Residence means tax residence under that country's rules; if you are resident in two places, HMRC uses the tie-breaker in Article 4 of the OECD model tax convention (PTM102300). This exclusion must keep being met for the relevant period (see below).
The QROPS is an occupational scheme and you are an employee of a sponsoring employer when the transfer is made (s.244D).
The QROPS was set up by an international organisation for its employees' past service, and you work for that organisation when the transfer is made (s.244E). HMRC stresses this "does NOT simply mean a multi-national employer"; it means an organisation covered by an Order under the International Organisations Act 1968.
The QROPS is an overseas public service pension scheme and you work for an employer that participates in it (s.244F).

You must give the information first. These exclusions are lost if you do not comply with the information rules (s.244I). Your administrator must send you the requirements within 30 days of your transfer request, and you must provide the information within 60 days beginning with the day of the request (SI 2006/567 reg 11BA(3) and (4)). GOV.UK points members to form APSS 263 and says the transfer will be taxed at 25% if you do not provide everything within those 60 days.
Transfers requested before 9 March 2017 are outside the charge altogether (s.244G(1)).
HMRC can add further exclusions by regulations (s.244H). The four above are the ones HMRC's manual lists for current transfers.

The EEA and Gibraltar change from 30 October 2024

Until Autumn Budget 2024 there was a fifth exclusion: a QROPS established in the EEA or Gibraltar, with the member resident in the UK, the EEA or Gibraltar. That meant someone living in the UK could transfer to, say, a Maltese QROPS without the charge. Finance Act 2025 s.32 omitted that exclusion (FA 2004 s.244C). The exact timing in s.32(6) and (7):

the repeal applies to transfers made on or after 30 October 2024;
except a transfer that is made both in execution of a request made before 30 October 2024 and before 30 April 2025, which kept the old exclusion.

What is left for EEA moves: if you live in, for example, France and transfer to a French QROPS, the same-country exclusion in s.244B still applies. A transfer that did benefit from the old EEA exclusion stays sheltered if you later move within the relevant period to anywhere else the old exclusion covered: the old s.244C test was residence in a "relevant territory", meaning "the United Kingdom or an EEA state" (s.244C(2) and (6) as it stood), so that includes moving back to the UK, and HMRC's manual also treats Gibraltar this way (PTM102300; PTM102400). HMRC's policy paper gives the reason for the change: to stop some UK residents getting "a double tax-free allowance whilst remaining in the UK" (HMRC policy paper).

The overseas transfer allowance

Since the lifetime allowance was abolished on 6 April 2024, transfers to a QROPS are tested against an overseas transfer allowance, which is "an amount equal to the member's lump sum and death benefit allowance" (s.244IB). The standard lump sum and death benefit allowance is £1,073,100; GOV.UK says the overseas transfer allowance "may be higher if you hold a protected allowance". For how that allowance works on lump sums and death benefits, see the LTA abolition, LSA and LSDBA guide.

It is used up by every transfer. The amount available is your allowance less the transferred value of each QROPS transfer made from 6 April 2024, whether or not that earlier transfer was charged (s.244IC).
Old lifetime allowance use counts. On your first QROPS transfer on or after 6 April 2024, the lifetime allowance you used before that date is deducted (with adjustments, for example for funds designated to drawdown that were tested as BCE 1); HMRC's example of someone who had used 60% of the standard lifetime allowance leaves them 40% of the overseas transfer allowance (PTM102200).
The excess is charged even if an exclusion applies. Where the transfer is excluded but its transferred value exceeds what is available, the charge is 25% of the excess (s.244IA(1); s.244JA(2)). If no exclusion applies, the charge is 25% of the whole transferred value (s.244JA(1)(b)).

The relevant period: moving country after the transfer

GOV.UK calls it "5 years", but the statutory relevant period is longer than five years from the transfer date unless the transfer is made on 6 April. It runs from the date of the transfer to the following 5 April, plus five full tax years after that (s.244AB(1)). A transfer made on 14 November 2026 has a relevant period running to 5 April 2032 (14 November 2026 to 5 April 2027, then 6 April 2027 to 5 April 2032).

Leaving the QROPS country triggers the charge. If the transfer was excluded because you lived in the QROPS country, it is assumed you will stay; if you stop living there before the relevant period ends (other than by dying), the charge is treated as arising at that time (s.244B(2)). The QROPS scheme manager and you are then jointly and severally liable (s.244J(4)).
What it is charged on. Only sums still represented in your ring-fenced transfer funds count (s.244K(6)). In HMRC's example a £400,000 transfer that had grown to £480,000 was charged on £400,000, the amount of the ring-fenced fund created by the transfer (PTM102550).
Moving into the QROPS country can get the tax back. If a transfer was charged and, during the relevant period, you become resident in the QROPS country (or another exclusion starts to apply), the charge under s.244AC is repayable (s.244M(1) and (2)). HMRC repays only the person who paid it: if the scheme paid from pension funds, the repayment goes back to the scheme, not to you, and a UK scheme administrator must claim within 60 days of becoming aware that a repayment is due. Only if you paid the charge from your own resources do you claim it yourself, no later than one year after the end of the relevant period (s.244M(6); PTM102600). A charge on the excess over the allowance under s.244IA cannot be repaid this way (PTM102600), and if the repayment is of a s.244AC charge on a transfer that was over your allowance, a s.244IA charge on the excess then arises (s.244IA(2)).
You must tell the schemes. Within the relevant period, tell both the UK administrator and the QROPS manager within 60 days of becoming or ceasing to be resident in a country; form APSS 241 can be used (PTM102950).

Who pays, how it is deducted, and what gets reported

Joint liability. On a transfer from a UK registered scheme, the scheme administrator and the member are jointly and severally liable, wherever either of them lives (s.244J(1) and (6)).
Usually deducted from the transfer. HMRC expects the administrator to deduct the tax before transferring. Then the transferred value is the amount before deduction (s.244K(8)). If the administrator pays the charge from scheme funds without deducting it, the transferred value is grossed up by one third of the chargeable portion, so the charge is larger (s.244K(7) to (7B); PTM102530).
Reporting. The administrator reports and pays through the Accounting for Tax return, and must give you a notice of the transfer and your liability within 90 days, whether or not a charge arose (PTM103050). You must report the charge on a Self Assessment return "even if the scheme administrator or scheme manager has already paid all the tax due" (PTM102200).
Administrator relief. An administrator that reasonably believed no charge was due can apply to HMRC to be discharged; that does not discharge you (s.244N).

Worked examples

Illustrations only. Each assumes no transfers to a QROPS before, no lifetime allowance used before 6 April 2024 (so the full £1,073,100 allowance is available), and that all the information was given on time.

1. UK resident, QROPS in Malta

Transfer of £300,000 made in 2026. The member lives in the UK, so the same-country exclusion does not apply, the EEA exclusion has gone, and no other exclusion applies. The charge is 25% of the whole transfer: £75,000. If the administrator deducts it, the QROPS receives £225,000. If instead the administrator pays it without reducing the transfer, the transferred value becomes £300,000 plus a one-third gross-up of £100,000, so £400,000, and the charge is £100,000 (s.244K(7A); the method follows HMRC's "Dougal" example in PTM102530).

2. Australian resident, Australian QROPS, large pot

Transfer of £1,300,000. The same-country exclusion applies, so there is no charge on the whole amount, but £226,900 is above the overseas transfer allowance. Charge: 25% × £226,900 = £56,725. Deducted from the transfer, the QROPS receives £1,243,275.

3. Moving on within the relevant period

An Australian resident transfers £360,000 to an Australian QROPS on 14 November 2026: excluded, and within the allowance. In 2029 they move to New Zealand and stop being Australian resident, before the relevant period ends on 5 April 2032. The charge now arises, with the QROPS manager and the member jointly liable. The fund has grown to £410,000, but following HMRC's approach in PTM102550 the transferred value is the £360,000 ring-fenced fund created by the transfer, so the charge is £90,000. Had they moved after 5 April 2032, no charge would arise.

Scam checks your UK scheme must make

Under the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021 (SI 2021/1237), in force from 30 November 2021 and extending to England and Wales and Scotland (reg 1(3)), a statutory transfer goes ahead only when the trustees or managers decide a prescribed condition is met (reg 4). For a QROPS that means checking for red and amber flags:

Residency evidence. For a QROPS that is not an occupational scheme, the trustees must ask you for evidence that you live in the QROPS country (reg 10(1)(b)): a copy of your formal residency documentation there and at least two other written items confirming residence (reg 12(2)).
Red flags stop the transfer under the statutory right: advice or arranging by someone without the authorisation the Financial Services and Markets Act 2000 requires, a request that followed unsolicited contact for direct marketing, an incentive to transfer (including access to your pension before normal minimum pension age, or "cashback"), or pressure to transfer (reg 8(5)); also failing to give a substantive response to the evidence request, or not providing evidence that you took the required guidance after an amber flag (reg 8(4)(a) and (b)).
Amber flags mean you must take the Money and Pensions Service scam guidance and show evidence that you did (reg 9(1)). They include an incomplete response to the evidence request, evidence that may not be genuine or did not come from you directly, evidence that does not show the residency link to the QROPS country (or, for an occupational scheme, the employment link) (reg 9(2) to (4)), high-risk or unregulated investments, unclear or high fees, an unclear or complex investment structure, any overseas investments in the receiving scheme, and a sharp rise in transfers to the same scheme or adviser (reg 9(5)).

If you are worried about a scam, GOV.UK points you to Report Fraud on 0300 123 2040 and to free guidance from MoneyHelper (GOV.UK: transferring your pension).

After the transfer, and Budget 2026

UK tax can still reach QROPS payments. A pension paid from a QROPS is taxable in the UK if you are UK resident when you receive it, and the "member payment charges" can apply to QROPS payments (PTM102000). If you might come back, read the returning to the UK tax guide.
Protections can be lost. A transfer may end lump sum, pension age or some lifetime allowance protections (PTM102000).
Budget 2026 (28 October 2026). The Budget 2026 overview of tax legislation and rates contains no measure on the overseas transfer charge or QROPS (OOTLAR, checked 30 October 2026). The rules above are current law.

Frequently asked questions

What is the overseas transfer charge on a QROPS transfer?

A 25% income tax charge on a transfer from a UK registered pension scheme to a qualifying recognised overseas pension scheme (QROPS). It is 25% of the transferred value unless an exclusion applies (a larger, grossed-up value if the scheme pays the charge without deducting it from the transfer), and 25% of any amount above your available overseas transfer allowance even when an exclusion does apply (Finance Act 2004 s.244JA).

Can I still transfer my UK pension to a QROPS in the EU tax free?

Only if another exclusion applies, most often that you live in the same country as the QROPS. The exclusion for QROPS in the EEA or Gibraltar was removed by Finance Act 2025 s.32 for transfers made on or after 30 October 2024, except transfers requested before that date and made before 30 April 2025.

What is the overseas transfer allowance?

It equals your lump sum and death benefit allowance (Finance Act 2004 s.244IB), which is £1,073,100 as standard and can be higher if you hold a protection. What is available is reduced by earlier QROPS transfers made from 6 April 2024 and, on your first such transfer, by lifetime allowance you used before that date.

What happens if I move country after transferring to a QROPS?

If the transfer escaped the charge because you lived in the QROPS country and you stop living there before the relevant period ends (normally the rest of that tax year plus five full tax years), and no other exclusion applies, the 25% charge arises at the time you move, on the transferred funds still held. Leaving because of death does not trigger it. You must tell both schemes within 60 days of the change, for example on form APSS 241.

Who pays the overseas transfer charge?

On a transfer from a UK registered scheme, the scheme administrator and the member are jointly and severally liable. The administrator normally deducts the tax from the transfer and reports it to HMRC on the Accounting for Tax return; the member must still report the charge on a Self Assessment return. If the charge arises later because you change country of residence, the liable persons are the manager of the QROPS holding the funds and you, not the UK administrator (Finance Act 2004 s.244J(4)).

Is a scheme on the HMRC ROPS list guaranteed to be a QROPS?

No. HMRC says it cannot guarantee that schemes on the list are recognised overseas pension schemes or that transfers to them will be free of UK tax. If the receiving scheme is not a QROPS, the transfer is an unauthorised payment taxed at 40% or more.