Glossary · UK
What is QROPS -- Qualifying Recognised Overseas Pension Scheme?
An overseas pension scheme meeting HMRC standards, allowing UK pension funds to be transferred abroad without an unauthorised payment charge, though a 25% Overseas Transfer Charge may apply if conditions are not met.
Full Definition
A Qualifying Recognised Overseas Pension Scheme (QROPS) is a non-UK pension arrangement that satisfies conditions set by HMRC under the Finance Act 2004 (regulations updated periodically), enabling UK-registered pension savings to be transferred to it without triggering the standard unauthorised payment charge (up to 55% of the fund). HMRC publishes a list of recognised QROPS on its website; membership changes frequently and a scheme must be on the list at the time of transfer. Since 9 March 2017, the Overseas Transfer Charge (OTC) of 25% applies to many QROPS transfers. The OTC does not apply if: the individual and the QROPS are in the same country; the individual is in the European Economic Area and the QROPS is in the EEA (note: post-Brexit rules tightened from October 2024, significantly reducing EEA exemptions); the scheme is an occupational pension of the individual's current employer; or the scheme is run by an international organisation. The OTC can be refunded if the individual subsequently moves to the country where the QROPS is based. Transfers count against the Overseas Transfer Allowance (broadly GBP 1,073,100 for 2026/27). HMRC reporting requirements continue for up to 10 years post-transfer. QROPS decisions carry a high scam risk and professional regulated advice is essential. For most UK emigrants the FIG regime (from April 2025) and existing UK pension drawdown flexibility may make QROPS unnecessary.