How it works

A qualifying recognised overseas pension scheme (QROPS) is a scheme that is approved by HMRC.

An approved QROPS gives you the flexibility to benefit from lower taxes, lower death taxes and increased flexibility.

A QROPS is registered outside the UK, and avoids UK taxes and investment restrictions

With a QROPS, you are charged the taxes and regulated by the pension investment restrictions of the country where the QROPS is registered. If it is registered in a country with lower taxes, and more suitable restrictions than those of the UK, you will benefit.

You have to reside outside the UK to benefit

To be eligible to apply for a QROPS, you must have tax residency outside the UK. However, the QROPS does not have to be registered in the same country where you hold tax residence.

Key timings around 5 to 10 years

It should take about two to three months to transfer your pension to an approved QROPS Scheme.

  • From day 1: You will pay income tax in the country that you reside in, not in the UK
  • From 5 years: UK “death” taxes will no longer apply to you.
  • From 10 years: HMRC will no longer restrict or oversee any of your investment decisions. In the first 10 years the trustees of your QROPS have an obligation to inform HMRC of any activity on your pension.

When you die, your pension remains intact

Whatever amount remains within your QROPS at the time of your death, will be passed along to your nominated beneficiaries. UK “death” taxes can be as high as 100% upon death of pension holders and spouse, leaving nothing for other beneficiaries (children and grand-children.