For many British expats living outside the country where a QROPS is based, a transfer is now much harder to justify than it was. Under UK rules for transfers requested on or after 30 October 2024, a 25% Overseas Transfer Charge generally applies unless an exclusion is met, such as living in the same country as the QROPS or the scheme being your employer's occupational scheme. The broad position in 2026/27 is that a QROPS may still make sense in a narrow set of cases, mainly where you are settled long term in the scheme's country.

What changed on 30 October 2024

A QROPS is an overseas pension scheme that HMRC recognises as able to receive transfers from UK registered pensions. Previously, people resident in the UK or the EEA could generally move a pension to an EEA or Gibraltar QROPS without the 25% charge. That is why Malta and Gibraltar schemes were widely used.

HMRC guidance confirms that this exclusion now only covers transfers requested before 30 October 2024 and completed before 30 April 2025. The exclusions that remain are narrower, and they only apply where the receiving scheme is a QROPS:

  • you are resident in the same country where the QROPS is established
  • the QROPS is an occupational scheme sponsored by your employer and you are an employee
  • a small number of specific cases for international organisations and overseas public service schemes

So a UAE, Spain or Portugal resident moving a UK pension into a Malta, Gibraltar or Isle of Man QROPS may face the 25% charge, depending on their residence, the receiving scheme's status and whether any exclusion applies.

The charge, the allowance and the watch period

It helps to separate four things:

  • The charge. The Overseas Transfer Charge is 25% of the transferred value where no exclusion applies.
  • The allowance. Everyone has an Overseas Transfer Allowance, £1,073,100 for most people. Transfers are tested against it even where an exclusion applies, and the excess over your remaining allowance is charged at 25%. The two charges are alternatives, not added together.
  • The exclusion conditions. These are tested at the time of transfer.
  • A later charge. If an exclusion applied but stops applying within five years, for example because you move country, the 25% charge can arise then. If you move to the QROPS country within five years, a charge already paid may be refunded.

Other rules that reduce the appeal

Even once the money is in a QROPS, UK rules do not fully let go. For funds transferred from 6 April 2017, UK member payment charges can apply to payments within five years of the transfer in any event, and after that unless you were non-UK resident in each of the 10 previous tax years.

For deaths on or after 6 April 2027, legislation is intended to bring most unused pension funds and certain pension death benefits into the inheritance tax calculation, subject to exclusions (such as certain death in service benefits and dependants' scheme pensions) and detailed rules still being finalised. The treatment depends on the type of arrangement, the member's long-term UK residence status and the nature of the benefit. The legislation covers qualifying non-UK pension schemes as well as UK registered ones, so moving overseas does not by itself take a pension outside these rules. See our guide to inheritance tax on pensions from 2027.

When it may still be worth considering

A QROPS may still deserve a look if:

  • you are settled for the long term in a country with a QROPS established there, and expect to stay at least five years
  • your employer offers an occupational scheme that qualifies as a QROPS
  • you have a specific need, such as currency or local tax treatment, that a UK scheme cannot meet

For many people a UK registered pension may offer similar flexibility without the transfer charge, depending on whether their provider serves non-residents. Our guide to the Overseas Transfer Allowance and charge covers the mechanics.

A worked example

Illustrative example only, not a real client.

Sarah lives in Dubai and has a £400,000 UK personal pension. She is considering a Malta QROPS. Assuming she is not Malta resident, the scheme is not her employer's and no other exclusion applies, the 25% charge would be £100,000, leaving £300,000 to reach the new scheme.

If Sarah instead lived in Malta and transferred to a Malta QROPS, the residence exclusion could apply. Assuming she has used none of her £1,073,100 allowance, her £400,000 is within it, so no Overseas Transfer Charge would generally arise under these assumptions, provided she does not move to another country within five years.

Common mistakes

  • Assuming the old EEA and Gibraltar exclusion still applies.
  • Forgetting the five-year watch period when planning a move.
  • Believing an overseas scheme sits outside UK inheritance tax from April 2027 without checking how the new rules apply.
  • Comparing schemes on investment choice alone without counting the charge.

A regulated financial adviser can help. Get in touch for a free introduction.

Sources and further reading

Last reviewed: October 2026. Tax year: 2026/27. Jurisdictions covered: UK. Rates, legislation and guidance change, so recheck before relying on this. Rules can differ between England and Wales, Scotland and Northern Ireland; tax residence is fact-specific; treaty outcomes depend on residence, domicile or nationality provisions; examples are simplified and omit reliefs, costs, exchange rates and anti-avoidance rules. This is general information, not financial, tax or legal advice. Take advice in the relevant country before acting.