Pensions

Should I transfer my UK pension to a QROPS?

Answered by Jordan Onraet-Wells, Founder & Chartered Tax Adviser (CTA). Published 17 July 2026. Last reviewed 17 July 2026.

The short answer

For most people, no: leaving your pension in a UK scheme and drawing it from abroad under treaty relief usually beats a QROPS transfer, because a transfer now risks a 25% Overseas Transfer Charge. Since 30 October 2024 the exclusion for EEA and Gibraltar schemes has gone, so the main charge-free route is being tax resident in the same country as the receiving scheme. A transfer chiefly earns its keep for settled emigrants with large pots worried about the April 2027 change that brings unused UK pension funds into inheritance tax.

The Overseas Transfer Charge is 25% of the amount moved to a QROPS unless a narrow exclusion applies, deducted up front by the scheme administrator.
Since 30 October 2024 there is no EEA or Gibraltar exclusion; the main survivor is being tax resident in the same country as the receiving scheme.
Even an excluded transfer is charged 25% on anything above your Overseas Transfer Allowance, normally £1,073,100.
The position is re-tested for five full tax years after the transfer: move country again inside that window and the 25% charge can apply retrospectively.
Kept in the UK, most private pensions can be paid gross under a double tax treaty using an NT code, claimed on Form DT-Individual.
From 6 April 2027 unused funds in UK-established pension schemes count in your inheritance tax estate even if you are non-resident: the one factor that genuinely strengthens the QROPS case.

Why leaving it in the UK usually wins

Keeping the pension in a UK scheme, typically a low-cost SIPP, avoids the charge entirely, keeps UK regulatory and compensation protection, and gives up almost nothing. Where the double tax treaty gives your new country the taxing rights over private pension income, HMRC can issue an NT (no tax) code, claimed on Form DT-Individual with a residency certificate, so the pension is paid gross. Budget for emergency tax on the first flexible withdrawal until the code is in place: keep it small and reclaim the overpayment.

The trap: the 25% charge and the five-year re-test

The Autumn Budget of 30 October 2024 removed the exclusion for EEA and Gibraltar schemes, so the classic expat route (a Malta or Gibraltar scheme while living elsewhere) is now charged the full 25%, and there is no HMRC-recognised scheme at all in the UAE or the other Gulf states. Even a charge-free transfer is re-tested for five full tax years: move country again inside that window and the charge can bite retrospectively. Anything above your Overseas Transfer Allowance is charged at 25% even where an exclusion applies.

When a QROPS still makes sense, and what to do

The honest exception is inheritance tax. From 6 April 2027, unused funds in UK-established schemes sit inside your UK inheritance tax estate even if you are non-resident, while a scheme established outside the UK falls out of scope once you are no longer a long-term UK resident. Before acting, fix your residence position, check the pension article of your treaty, price the 2027 exposure on your actual pot, and only then compare a specific same-country QROPS against staying put, alongside a regulated pension transfer adviser. Our full comparison and UK pensions and inheritance tax abroad guide run the numbers both ways.

Go deeper

Sources and further reading

This is general information for the 2026/27 UK tax year, not personal tax advice; speak to a Chartered Tax Adviser about your own position.

Applies to you? Ask us directly

A page can only take you so far. Book a free 30-minute clarity call with Jordan, a Chartered Tax Adviser, and get this answered for your exact situation, on a fixed fee agreed upfront.

All quick answers