If the last thing you read about QROPS was written before October 2024, it’s probably wrong – or at least out of date in the one area that matters most: whether you’ll actually pay tax on the transfer. The Autumn Budget 2024 removed one of the most widely used exemptions from the Overseas Transfer Charge, and a lot of guidance still circulating online hasn’t caught up.
A Quick Recap: What a QROPS Is
A Qualifying Recognised Overseas Pension Scheme is an overseas pension scheme that HMRC recognises as meeting the requirements to receive a transfer from a UK registered pension without triggering an unauthorised payment charge. It moves your pension outside the UK pension system entirely – useful for some long-term expats, unnecessary for others.
The Old Rule: The EEA Exemption
Before 30 October 2024, there was a widely used exemption from the 25% Overseas Transfer Charge (OTC): if you were resident in the EEA and transferred to a QROPS also based in the EEA, no charge applied – even if you and the scheme weren’t in the same specific country. This is what made transfers to Malta or Gibraltar-based QROPS so popular among expats living anywhere across Europe.
The New Rule: What Changed
That blanket EEA exemption was removed in the Autumn Budget 2024. The exemptions that remain are considerably narrower: you’re resident in the same specific country as the QROPS itself, the QROPS is an occupational pension scheme sponsored by your employer, or it’s an overseas public service or international organisation scheme.
In practice, the “same country” test now does almost all the work. If you live in Italy and transfer to a Malta QROPS, the charge is very likely to apply – something that simply wasn’t true before the rule change. Malta itself is one of the only jurisdictions where an EEA resident living in that exact country can still transfer without triggering the charge, precisely because it satisfies the same-country test.
Why This Catches People Out
A lot of QROPS planning built over the past decade assumed the EEA exemption would remain available indefinitely, and plenty of existing structures were set up on that basis. If your circumstances or plans have changed since a QROPS was set up – including if you’re considering a further transfer, or moving to a different country – it’s worth checking whether the current rules still work in your favour, rather than assuming the position that applied when you first transferred still holds.
The Five-Year Relevant Period
There’s a second wrinkle worth understanding: even a transfer that’s exempt from the OTC when it’s made isn’t necessarily exempt forever. A “relevant period”, generally five tax years from the date of transfer, means that moving to a different country within that window can trigger the charge retrospectively, even though it didn’t apply at the time. This makes the decision less “set and forget” than it might first appear, particularly for expats whose circumstances or country of residence might change again in the near term.
What Hasn’t Changed
Some things remain the same. QROPS still need to appear on HMRC’s recognised list, which is updated roughly twice a month – always worth checking directly rather than relying on a promoter’s claims. Minimum pension access age is still 55, rising to 57 from April 2028. And the ten-year reporting window, during which the scheme administrator must report certain payments and events back to HMRC, is unaffected by the October 2024 changes.
Is a QROPS Still Worth Considering?
Yes, for the right circumstances – but the calculation has genuinely changed for a lot of people, particularly EEA-based expats who would previously have transferred without a second thought. It’s now much more important to check whether you meet one of the narrower remaining exemptions before assuming a QROPS transfer will be tax-free, and to weigh that properly against the alternative of consolidating into a UK-based SIPP instead, which sidesteps the OTC question entirely by staying within the UK pension system.
Where to Go From Here
We’ve set out the full current QROPS rules, including which transfers remain exempt from the Overseas Transfer Charge and the ongoing reporting obligations, on our QROPS for Expats page. If you’re weighing QROPS against a UK-based alternative, our Expat SIPP page covers the comparison, and our Expat Pension Transfers page covers the general transfer process. For the full picture of expat pension planning, start at our Expat Pension Planning hub.
Frequently Asked Questions
Will I definitely pay the 25% charge if I transfer to a QROPS now?
Not definitely – it depends on whether you meet one of the remaining exemptions, mainly whether you’re resident in the same specific country as the QROPS.
I set up a QROPS before October 2024 – does the new rule affect me?
The charge generally applies based on the rules in place at the time of the original transfer, but the five-year relevant period means a subsequent move could still trigger it under current rules – worth checking your specific position.
Is Malta still a viable QROPS jurisdiction?
Yes, particularly for expats actually resident in Malta, since that satisfies the same-country test. It’s less straightforward for EEA residents living elsewhere, following the October 2024 change.
What’s the alternative if a QROPS no longer makes sense for me?
Many expats find a UK-based SIPP achieves similar consolidation and investment flexibility without the OTC or reporting considerations – see our Expat SIPP page.
Get in touch with details of your pension and where you’re living, and we’ll help you understand where you currently stand under the updated rules.
