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

Get financial advice

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.

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.

Ready to chat with
an adviser?

Get started

Reviews of Holborn Assets

You may also be interested in

cyprus healthcare system GESY

Healthcare guide for expats in Cyprus

Health is perhaps the most important thing in life. Gandhi once said that “health is the real wealth.” Living as an expat in Cyprus means that you might experience health...

Read more
where you should buy property in cyprus

Buying property in Cyprus: Where and why you should invest

Buying property in Cyprus is one of the investment options that expats should think about when moving to the island. Cyprus is one of the most beautiful islands in the...

Read more
Cyprus beach view

Moving to Cyprus from the UK: The Ultimate Guide

Moving to Cyprus from the UK; have you ever thought about that? If you would like to change your lifestyle, live on one of the most beautiful islands in the...

Read more
life insurance cover for different life stages

Life insurance cover for different life stages

“Fun is like life insurance; the older you get, the more it costs” is a popular quote you might find when looking for life insurance cover on the internet. This...

Read more