QROPS Guide for Expats – Understand Your Options (2025/2026 Edition)
📚 QROPS Guidance Series (2025/2026)
This series brings together the most important guidance for British expats and returning UK residents with overseas pensions. From understanding the latest HMRC rule changes to deciding whether to keep your QROPS or move to a UK SIPP, these articles provide clear, practical insights to help you make confident financial decisions.
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- QROPS Guide for Expats – Understand Your Options (2025/2026 Edition)
- Are QROPS Still Suitable in 2026?
- QROPS Advice: How New HMRC Rules Could Impact Your Overseas Pension Transfer
- Evaluating Expat Pension Options – Should I Keep My QROPS or Move to a UK SIPP?
- QROPS Explained: How the 5-Year Rule Affects Your Overseas Pension
- I’m Unhappy With My QROPS – What Should I Do?
- How to Choose the Right QROPS Adviser
- QROPS Poland: Should British Expats Review or Transfer Their UK Pension?
Qualifying Recognised Overseas Pension Scheme
If you’re a British expat with a UK pension, chances are you’ve come across the term QROPS, or perhaps you already have one.
But with so many rule changes over the past few years, it’s easy to be unsure whether a QROPS is still the right choice.
This guide explains what a QROPS is, how it works, when it makes sense (and when it doesn’t), and what your options are in 2025.
💬 Thinking about your QROPS? Book a free review call to explore your options and get a clear, independent opinion.
Key Takeaways
- QROPS were introduced in April 2006 as part of the “pensions simplification” reforms.
- The original goal was to allow expatriates to take their pension with them to their new country of residence, ensuring continuity of savings and retirement planning.
- The Overseas Transfer Charge (OTC) now applies to most QROPS transfers.
- The 5-year and 10-year HMRC rules remain crucial and can have major tax implications if you return to the UK.
- International SIPPs now offer similar flexibility with lower costs and UK regulatory protection.
Regular reviews are vital, especially if your residency, tax position, or investment performance has changed.
What Is a QROPS?
QROPS stands for Qualifying Recognised Overseas Pension Scheme.
They are simply overseas pensions that comply with HMRC rules.
👉 See also: QROPS Advice: How New HMRC Rules Could Impact Your Overseas Pension Transfer
Why QROPS Were Created — and Why Their Original Appeal Has Faded
QROPS were launched in 2006 to give people retiring overseas the freedom to take their UK pensions with them.
It was a sound idea, but as with many pension reforms, the details became muddy.
Over time, QROPS began to be used for tax arbitrage rather than genuine retirement planning.
Before 2015, transferring to a QROPS helped avoid capped drawdown limits and annuity rules. That ended when Pension Freedoms arrived, giving UK pensions the same flexibility.
Many also used QROPS to avoid Lifetime Allowance (LTA) charges on large funds. With the LTA now abolished, this is no longer relevant.
And for a while, moving to an EEA or Gibraltar-based QROPS could unlock extra tax-free cash and avoid the Overseas Transfer Charge (OTC).
That changed in October 2024, when the government withdrew these exemptions.
In short: The old reasons for using a QROPS have largely disappeared. Today, they serve a narrow audience, typically high-value, long-term non-UK residents.
A Practical Guide for British Expats Reviewing Their Overseas Pension
Download my FREE QROPS Checklist
If you set up a QROPS several years ago, it may no longer be suitable for your circumstances. The rules have changed, costs may have risen, and your residency or tax position might be different. This checklist helps you quickly assess whether your QROPS still fits your goals or whether it’s time to seek professional advice.
How QROPS Work
Although more tightly regulated today, the process is still straightforward when managed correctly.
Step-by-Step Overview
- Transfer request – You ask your UK pension provider to move funds to a qualifying overseas scheme.
- Eligibility checks – The receiving scheme confirms compliance, residency, and potential tax exposure.
- Transfer completion – Funds move to the overseas pension, managed by a trustee.
- Reporting obligations – The trustee must report to HMRC for 10 years after the transfer.
- Taxation – Withdrawals are usually taxed in your country of residence, unless you return to the UK within 5 years.
👉 See also: QROPS Explained: How the 5-Year Rule Affects Your Overseas Pension
🌍 Common QROPS Jurisdictions
Malta, Gibraltar, Guernsey, and the Isle of Man are the main centres.
Each has distinct tax and regulatory frameworks, the right choice depends on where you live now and where you might live next.
The Main QROPS Rules You Need to Know
| Rule | Description | Why It Matters |
| 5-Year Rule | UK tax applies again if you return within 5 years. | Prevents short-term transfers for tax reasons. |
| 10-Year Rule | Trustees must report to HMRC for 10 years. | Ensures transparency. |
| Overseas Transfer Charge (OTC) | 25% charge unless you and your QROPS are in the same country. Since Oct 2024, EEA exemptions removed. | Avoid costly surprises. |
| Pension Age Rule | Access generally restricted to age 55+. | Prevents early withdrawals. |
| HMRC QROPS List | Must remain on this list. | Protects against unauthorised transfer tax. |
Advantages of a QROPS
✅ Multi-currency options to match local spending
✅ Potential inheritance advantages
✅ Possible insulation from future UK rule changes
Disadvantages and Risks
❌ Higher setup and annual costs
❌ Limited consumer protection outside the FCA’s scope
❌ Possible double taxation if residency changes
❌ Poor investment oversight in some schemes
👉 See also: I’m Unhappy With My QROPS – What Should I Do?
Are QROPS Still Suitable in 2025?
With the Lifetime Allowance abolished, the main reasons for new QROPS transfers are far fewer than before.
QROPS still work for:
- Long-term non-UK residents with large pensions
- Expats in countries with unfavourable UK pension tax treaties
- Those who want long-term currency and jurisdictional control
But for most, a UK-regulated International SIPP provides equivalent flexibility with lower cost and stronger protection.
QROPS vs International SIPP (2025)
| Feature | QROPS | International SIPP |
| Regulation | Overseas | UK FCA |
| Currency | Multi-currency | Multi-currency |
| Setup cost | High | Moderate |
| Transfer charge risk | Possible | None |
| Ideal for | Long-term non-UK residents | Expats with UK connections |
In short: Unless you’re permanently overseas with a large fund, a modern International SIPP will usually serve you better.
👉 See also: Are QROPS Still Suitable in 2025?
Case Studies: The Good and the Bad
Case Study – QROPS Still Makes Sense
Helen, 66, retired in Portugal 12 years ago. Her £1.2m UK pension was transferred into a Maltese QROPS before she left the UK.
She’s still living in Portugal and receives income in euros with favourable tax treatment under the Portugal–Malta treaty.
Because she has been outside the UK for more than 10 years, she is not considered a Long Term Resident and the QROPS will not be treated as a UK situs asset when the pension IHT rules change in 2027.
A review confirmed that her QROPS remains suitable.
See also: Are UK Pensions Now Liable for Inheritance Tax? The New Pension IHT Rules Unpacked
Case Study – Time for a Change
David, 62, transferred a £650,000 pension to a Malta QROPS in 2016 when he was living in Dubai.
He returned to the UK in 2023.
After a full review, he repatriated his pension into a UK SIPP, significantly reducing fees and simplifying his long-term retirement structure.
Should You Keep Your QROPS or Move It?
Consider a review if:
- You’ve changed residency
- Fees are high or performance is poor
- You’re planning to return to the UK
- You’ve lost contact with your adviser
See also: Evaluating Expat Pension Options – Should I Keep My QROPS?
How to Find a Qualified QROPS Adviser
Look for:
- Chartered status and Pension Transfer Specialist qualifications
- Clear, fee-based advice
- Demonstrable cross-border experience
Always choose advice based on qualifications and experience, not proximity or promises.
👉 See also: How to Find a Qualified QROPS Adviser
❓ Frequently Asked Questions
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Can I still transfer my UK pension into a QROPS?
Yes, provided the scheme is on HMRC’s list.
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What happens if my QROPS is removed from the HMRC list?
You should review your position immediately.
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Do I pay tax twice?
Usually not. Most double-tax treaties prevent it, but outcomes vary by country.
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Can I move my QROPS back to the UK?
Yes, you can transfer your QROPS back to a UK pension such as a SIPP.
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How are withdrawals taxed?
Typically in your country of residence. The UK may tax them again if you return within 5 years.
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Are QROPS covered by the UK’s FSCS?
No, UK protections don’t apply once funds are overseas.
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Can I access funds before age 55?
Only in cases of serious ill-health.
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What if I move to another country after transferring?
The Overseas Transfer Charge could apply.
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What’s the minimum fund size for a QROPS?
Typically £250,000–£500,000 due to costs.
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Are QROPS subject to UK inheritance tax?
Currently not. However, UK pension IHT rules are set to change from 2027, and it will then depend on whether you are a Long-Term Resident.
📘 Glossary of Key Terms
QROPS: Qualifying Recognised Overseas Pension Scheme — an overseas pension meeting HMRC standards.
HMRC: Her Majesty’s Revenue & Customs — the UK tax authority.
Overseas Transfer Charge (OTC): A 25% tax charge applied to certain transfers since 2017; widened in 2024.
5-Year Rule: UK tax may apply to QROPS withdrawals if you return within five years.
10-Year Rule: Period during which QROPS trustees must report to HMRC.
SIPP: Self-Invested Personal Pension — a flexible UK pension structure.
International SIPP: A UK-regulated SIPP for expats, offering multi-currency access.
Trustee: The organisation responsible for managing your QROPS under local law.
Double-Tax Treaty: Agreement between two countries to prevent income being taxed twice.
Long-Term Resident (LTR): If you have been UK resident for 10 or more of the last 20 years.
Next Steps: Choose What Works Best for You
🧾 Option 1: Book a Complimentary QROPS Review Call
Discuss your current QROPS and receive a personalised assessment.
📄 Option 2: Download the Free QROPS Review Checklist (PDF)
A practical tool to help you assess costs, rules, and suitability.
📚 Option 3: Read About International SIPPs
Explore how modern alternatives compare to QROPS in 2025.
🧠 Final Thoughts
The QROPS landscape has evolved dramatically since its introduction nearly two decades ago.
What began as a flexible solution for British expats has now become a niche option, still valuable in some circumstances, but no longer the automatic choice it once was.
Today’s QROPS rules are tighter, fees can be higher, and the once-common tax advantages have been scaled back or removed entirely.
For many expats, especially those within the EU or considering a future return to the UK, modern International SIPPs often offer the same flexibility, lower costs, and stronger regulatory protection.
That doesn’t mean QROPS are obsolete.
For long-term non-UK residents with sizeable pensions, stable overseas residency, and clear tax benefits in their host country, a well-managed QROPS can still be the right fit.
The key is not where your pension is, but whether it’s still working for you.
If you already have a QROPS, take time to review it carefully, check your fees, investment performance, and residency alignment.
If you’re considering one, seek impartial, qualified advice before making any move.
The right pension structure should make your retirement simpler, not more complicated.
Talk to an Expert
Thinking about a QROPS or already transferred years ago and not sure if it is still right for you? The truth is that many older QROPS arrangements carry multiple fee layers, use commission-heavy bonds, and limit investment choice. For a lot of British expats today, a modern UK SIPP can deliver lower costs, greater flexibility and strong FCA consumer protection.
I am Ross Naylor, a UK-qualified Chartered Financial Planner and Pension Transfer Specialist with nearly 30 years’ experience helping expats review QROPS, compare with SIPPs, and align pension strategy with local tax rules, currency needs and future plans, including a possible return to the UK.
If performance has disappointed, fees seem high, your structure is wrapped in an old offshore bond, or you are unsure how your pension will be taxed where you live, I will provide a clear second opinion and a practical plan that fits your goals.
Book a QROPS review call