A SIPP is a UK registered personal pension where you choose the investments, and it generally stays under UK pension rules wherever you live. A QROPS is an overseas pension scheme that HMRC recognises as able to receive UK pension transfers. Under UK rules in 2026/27, the biggest practical difference is the cost of getting in: a UK to UK transfer into a SIPP does not attract the Overseas Transfer Charge, while a transfer to a QROPS may face a 25% charge unless an exclusion applies, such as living in the scheme's country.
What each one is
SIPP (self-invested personal pension). A type of UK personal pension, registered with HMRC, offering a wide choice of investments. It follows UK rules on access age, tax-free cash and death benefits. Some UK providers accept non-resident members and some do not. A provider's decision may also reflect the regulatory requirements of the country where you live. A UK provider may be unable to provide ongoing investment services, advice or new contributions even though the pension remains legally valid.
QROPS (qualifying recognised overseas pension scheme). A scheme established outside the UK that meets HMRC conditions to receive transfers from UK registered schemes. Once money is transferred, it is run under its home country's rules, but some UK reporting and tax rules continue to apply to transferred funds for a period.
Getting money in
Moving a UK pension into a SIPP is a transfer between registered schemes, so no Overseas Transfer Charge applies.
A transfer to a QROPS is tested against the Overseas Transfer Charge. For transfers requested on or after 30 October 2024, the 25% charge generally applies unless:
- you are resident in the same country as the QROPS, or
- it is your employer's occupational scheme and you are an employee
The former EEA and Gibraltar exclusion only covers transfers requested before that date. Where an exclusion applies, the transfer is still tested against your Overseas Transfer Allowance, £1,073,100 for most people, and only the excess is charged. If the exclusion stops applying within five years, for example because you move, a charge can arise later.
New contributions differ too. A non-resident may qualify for relief under the relevant UK individual rules, including the five-tax-year condition, but the precise result depends on when the pension was joined, the tax year of contribution and whether the contribution is made through relief at source. Where relief is available without UK earnings, £3,600 is the gross limit for tax relief, not a general limit on contributions. Contributions to a QROPS depend on the rules of that country.
Getting money out
| SIPP | QROPS | |
|---|---|---|
| Minimum access age | 55, rising to 57 on 6 April 2028, subject to protected pension age rules and scheme-specific exceptions | Generally aligned to UK rules for transferred funds |
| Tax on income | Depends on residence and any double tax treaty | Local rules and your country of residence |
| UK charges | Normal UK rules | For funds transferred from 6 April 2017, UK charges can apply unless non-UK resident for the 10 previous tax years, and within five years of transfer |
| Currency | Usually sterling | Often multi-currency |
Under Article 17 of the UK and UAE double tax treaty, pensions paid to a UAE resident are generally taxable only in the UAE, which does not currently levy personal income tax, subject to meeting the treaty's residence test.
Inheritance tax from April 2027
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 Finance Act 2026 covers UK registered pensions and qualifying non-UK pension schemes, and treats pension property as situated where the scheme is established. Moving to a QROPS is not a simple way out of the new rules.
A worked example
Illustrative example only, not a real client.
Priya lives in Abu Dhabi with £200,000 across two old UK workplace pensions, and assume a UK provider will accept her as a non-resident.
- Combining them into a UK SIPP: no Overseas Transfer Charge, £200,000 stays invested (ignoring any provider costs).
- Moving them to a Gibraltar QROPS: assuming she is not Gibraltar resident and no exclusion applies, a 25% charge of £50,000 arises, leaving £150,000.
She would need a clear and lasting benefit from the QROPS to make up that £50,000.
Our guide to transferring a UK pension when living in the UAE looks at the options, and the Overseas Transfer Allowance guide covers the charge.
Common mistakes
- Treating a SIPP and a QROPS as interchangeable.
- Assuming every UK provider accepts non-resident members, or that moving platform is always possible.
- Believing a QROPS removes a pension from UK inheritance tax from April 2027.
- Forgetting the UK charges that can follow QROPS funds.
A regulated financial adviser can help. Get in touch for a free introduction.
Sources and further reading
- HMRC Pensions Tax Manual PTM102200: overseas transfer charge principles
- HMRC Pensions Tax Manual PTM044100: relevant UK individuals
- GOV.UK: Increasing normal minimum pension age
- Finance Act 2026, section 66
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.