A Qualified Recognised Overseas Pension Scheme (QROPS) is recognised by HMRC as a pension scheme that is eligible to receive transfers from UK pensions.

What is a QROPS?

A Qualified Recognised Overseas Pension Scheme, or QROPS, is an overseas pension scheme that is run by a trustee(s) outside of the UK.

A QROPS can receive tax-free transfers from UK registered pension funds. They were first introduced to simplify moving UK pension savings abroad for those who choose to permanently relocate.

Is a QROPS regulated?

A QROPS is recognised by HMRC and allows UK Pension Benefits to be transferred into them. For a QROPS to become ‘qualified’ it must meet the criteria set by HMRC.

All UK pensions including a QROPS are regulated by the Financial Conduct Authority (FCA). Once a pension is transferred into a QROPS and a period of time has elapsed, your pension is regulated by the governing body of the jurisdiction that the QROPS resides in.

Reviews of Holborn Assets

Why use a QROPS?

Transferring a UK pension to a QROPS can offer flexibility, tax and currency benefits.

A key advantage of transferring to a QROPS is your pension is not subject to UK rules and tax laws. Unlike a Self-Invested Personal Pension (SIPP) a QROPS can be held in a jurisdiction outside of the UK that is tax advantageous. This is why a QROPS is usually held in jurisdictions such as Gibraltar.

Under certain circumstances, it is possible to withdraw a tax-free lump sum if you are a Cyprus resident. If this is not possible, QROPS withdrawals and UK pension income(s) would be taxable in one of two possible ways:

  1. A flat rate of 5% tax with a €3,430 allowance
  2. Added to your annual income, charged at the relevant rate for your income tax scale (you pay 0% for an income under €19,501 but for an income above that threshold, the tax scale ranges from 20% to 35%).

If you are considering a QROPS be aware, other pension schemes offer a guaranteed minimum pension and other benefits that are built into the final salary scheme. These benefits are not transferable to a QROPS, only the actual value is. However, if you transfer into a QROPS, your pension is protected from exchange rate fluctuations as it will be paid in the local currency.

Talk to us about QROPS

    Your privacy is extremely important to us. We'll never sell or share your data to a 3rd party.

    From our blog

    Recent blog post featured image

    Achieving financial freedom in the current climate

    Senior Associate for Holborn Assets Cyprus, Ian Woodcock, spoke with Russian TV World about achieving financial freedom in the current economic climate.

    Recent blog post featured image

    Brexit: How to Prepare for Your Retirement

    An estimated 70,000 British expats are living in Cyprus. With so many UK expats retiring in Cyprus, the future of UK pensions is a hot topic.

    Recent blog post featured image

    The Cost of Raising a Child: 0-17 Years Old

    As childcare costs continue to rise, it's no secret that raising a child is expensive but you might not realise just how expensive it can be.

    Recent blog post featured image

    How to Remortgage as an Expat

    In a nutshell, remortgaging is where a new mortgage is taken out to replace your current mortgage or to borrow money that is secured against your property.

    Join our newsletter to receive exclusive updates