You may be able to make the transfer, but for a UAE resident it will generally cost 25% of the amount transferred under UK rules in 2026/27. The exclusion that let people move pensions to EEA and Gibraltar schemes without charge only covers transfers requested before 30 October 2024. A Dubai resident usually does not meet the remaining exclusions for a Malta scheme, so the Overseas Transfer Charge would normally apply.

Why the charge applies

A QROPS is an overseas pension scheme recognised by HMRC as able to receive UK pension transfers. Malta became a popular home for these schemes, partly because of the former EEA exclusion.

HMRC guidance confirms the EEA and Gibraltar exclusion only applies to transfers requested before 30 October 2024 and completed before 30 April 2025. The main exclusions now are:

  • you are resident in the same country as the QROPS
  • the QROPS is your employer's occupational scheme and you are an employee of that employer

These exclusions only work if the receiving scheme is a QROPS. If you live in the UAE and transfer to a Malta QROPS that is not your employer's scheme, neither exclusion would generally apply, and the charge is 25% of the transferred value. Gibraltar and Isle of Man schemes are tested the same way: the result depends on your residence, the scheme's status and whether any exclusion applies, not on the territory alone.

The allowance and the five-year rule

The broad position is:

  • The charge. 25% of the transfer where no exclusion applies.
  • The allowance. Every member has an Overseas Transfer Allowance, £1,073,100 for most people. If an exclusion applies, only the part above your remaining allowance is charged at 25%. If no exclusion applies, the whole transfer is charged. The two charges are alternatives, not cumulative.
  • A later change. Your position is watched for five years. GOV.UK says that if you move to the scheme's country within that time you may get a refund, and if you were excluded but move elsewhere, the charge can arise. You must tell the scheme using form APSS 241.

You also need to give the information on form APSS 263 within 60 days of requesting the transfer. If you do not, the transfer is taxed at 25%.

What you give up by staying in Dubai with a UK pension

Often relatively little. Under Article 17 of the UK and UAE double tax treaty, pensions paid to a UAE resident are taxable only in the UAE, subject to meeting the treaty's residence definition, and the UAE does not currently levy personal income tax. With an NT code from HMRC, you may be able to draw a UK pension without UK tax deducted. Our guide to drawing a UK pension abroad explains how that works.

Transferring overseas also does not take a pension outside the new inheritance tax rules. 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. Qualifying non-UK schemes are covered alongside UK schemes.

A worked example

Illustrative example only, not a real client.

James lives in Dubai and has £300,000 in a UK workplace pension. He transfers it to a Malta QROPS. Assuming he is not Malta resident, the scheme is not his employer's and no other exclusion applies, the 25% charge is £75,000. Only £225,000 is invested in the new scheme.

Three years later James retires to Malta. Because he moved there within five years of the transfer, he may be able to reclaim the £75,000, though that money would have been out of the market in the meantime and the refund depends on the scheme and HMRC processing his APSS 241 notification.

When it might still be considered

You may want to look at it if you are confident you will move to Malta soon and stay, or if there is a specific reason a UK scheme does not work for you. In most other cases, the question is whether any benefit outweighs a 25% cost. See our guide to the Overseas Transfer Allowance and charge.

Common mistakes

  • Relying on advice or marketing from before 30 October 2024.
  • Missing the 60-day deadline for form APSS 263.
  • Assuming a QROPS escapes the April 2027 inheritance tax changes.
  • Not telling the scheme about a move within five years.

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 (UK); current UAE rules. Jurisdictions covered: UK, UAE. 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.