Article Summary

QROPS is an overseas pension scheme that is qualified, regulated, and governed by UK legislation. The main objective of the QROPS is to enable a UK expatriate who lives in an EEA country to manage their UK pension in the country where they currently reside. From April 2006, UK pensions could be transferred to any overseas pension scheme that had notified HMRC of its status as a QROPS under the Finance Act 2004. 

We also discuss the Malta QROPS in one of our videos below. Watch and learn how the Malta QROPS tax charge works and everything you need to know about. Furthermore, we also provide tips and reason why you should consult an FCA-regulated IFA and how they can help you with your situation.

Malta QROPS Tax Charge Expat: Income Tax – Are UK Pensions Taxable in Malta?

What is QROPS?

QROPS is an overseas pension scheme that is approved by Her Majesty’s Revenue and Customs (HMRC). QROPS have existed since April 6, 2006, when the United Kingdom enacted pension legislation in response to an EU requirement on capital mobility. The goal was to make pension planning easier for people living abroad who have UK pensions.

Due to legislative changes in 2017, a UK pension fund can only be transferred to the same jurisdiction where the pension member resides to avoid a 25% transfer tax. HMRC considers the European Economic Area (EEA) to be the same jurisdiction, which means that someone living in one EEA country can transfer their pension to any other EEA country. 

To be a QROPS, certain requirements must be met, such as: 

  1. The scheme must be a pension scheme conforming to the definition in the Pension Tax Manual.
  2. The scheme must be an overseas pension scheme established outside of the UK and meet the regulations test by being taxed as an occupational scheme in another country.
  3. The plan is a recognised overseas pension plan (ROPS). 
  4. A benefits tax relief test must be met. 
  5. The tax treatment applies to both residents and non-residents. It cannot be set up solely for non-residents. 
  6. It must also be established in an EEA member state, in a country with a double taxation agreement with the UK, and meet the age cap. 
  7. Except in the case of illness, benefits are not payable before age 55.

If a member transfers to a scheme that is exempt from this charge, for example, by transferring to a scheme within the EEA and living in the same country, but then transfers to a scheme where the tax charge would have applied within five tax years of the transfer, the pension fund will become subject to the tax charge. Regardless of where the QROPS is located, it will be subject to UK taxation regulations for five tax years following the date of transfer.

The tax charge is jointly and severally liable to both the outgoing plan administrator and the receiving QROPS, and they must deduct it and pay it directly to HMRC.


If you have a UK pension scheme or a UK personal pension, there are various benefits to moving it to a Malta QROPS, especially if you have been or will be a UK non-resident for at least 10 complete tax years and do not expect to take benefits for at least another 5 years.

Malta is generally a jurisdiction of choice for QROPS pensions for European Union residents since it is a powerful financial hub, is well-regulated, allows for pension freedoms, and has many dual tax treaties in place with other member states.

Why Malta? 

Malta, located in the EEA zone, has become one of Europe’s top financial centres. This has been fueled by the island’s reputation for stability, predictability, and security, as well as having a stable, EU-compliant regulatory framework and a deep talent pool that has drawn enterprises from all over the world looking for opportunities to conduct business in Malta. 

The Benefits of Transferring a UK Pension to a Malta QROPS

Malta is also a highly regulated financial jurisdiction, and its membership in the EU is subject to laws governing the free flow of cash, so future pension payments, among other things, should not be disrupted further.

Malta has also established QROPS that meet HMRC requirements, making Malta one of the most reputable jurisdictions for QROPS with no conflicting requirements. Individuals who establish a QROP in Malta would benefit from significant tax flexibility on pension benefits. The following are some additional advantages:

English as The Main Language 

Malta is a good destination for UK expatriates to hold their pension provisions, with English as the official language and legislation published in English and traditionally founded on common law. All information from QROPS providers is in English, and there is a dual tax treaty in place with Spain that ensures income tax is not payable at the time of withdrawal.

Income drawdown

You can begin receiving plan retirement benefits as early as age 55 and no later than age 75. Your retirement pension is given by drawdown, which means that a portion of your QROPS fund is pulled down and used to provide the pension each year, while the remainder of your fund remains invested.

Early Withdrawal  

Retirement age is generally 55, but there is some flexibility in cases of illness or at the discretion of the trustees (subject to any legislative restrictions). Special provisions can also be provided for people in specialist occupations, usually sports-related, such as football players and boxers, to retire significantly earlier.

Is Malta QROPS Taxable?

The growth of QROPS, like any other UK pension, is tax-free. The QROPS’s income, however, is subject to taxation. That is valid for all UK pensions. As a result, when you take a withdrawal or receive pension income from your QROP, you must declare this income on your tax return in your home country.

If a Double Taxation Agreement (DTA) exists between your QROPS jurisdiction and your country of residence, your QROPS provider may pass this income to you in its entirety. Malta currently has 71 DTAs in place, including the typical expat retirement locations. For most clients, this makes Malta one of the most influential QROPS jurisdictions.

Income is taxed according to the laws of the jurisdiction in which the QROPS is based. QROPS payments are often made gross, with no additional tax due in the jurisdictions where they are made. Schemes in the United Kingdom are taxed at the point of origin. Even though the transfer of benefits is a BCE, there will be no additional benefit testing against the LTA, allowing for future fund value increases.

Cameron James, Expat Financial Planning – Your Trustworthy Pension Transfer Specialist

Cameron James Expat Financial Planning is the preferred independent financial adviser for Final Salary pensions, QROPS, and SIPP transfers. With over ten years’ experience in pension transfers, Cameron James is now servicing clients in 26 countries. 

Our mission is to bring regulated and transparent advice to our clients. As such, our clients know how much their advice will cost in advance, with no hidden fees.

Cameron James Expat Financial Planning has a sophisticated cash flow management system in place. Our senior management team has a decade of experience in serving expats and is committed to serving the requirements of expats for decades to come.

Transferring a DB or DC pension into a SIPP plan for expats is not a simple decision. Before deciding, many details and procedures must be thoroughly understood. Without this knowledge, the benefit could turn into a potential loss.

It is essential to seek competent advice from a qualified financial adviser to verify that your profile matches the options available and to ensure that your choice meets the regulations for your UK pension transfers. Meet one of our dedicated advisers to get a full understanding of your situation.

Our Founder & CEO -
Dominic James Murray

I have been in the UK Pension Transfer industry for over 11 years, and have witnessed seismic changes in the UK Pension rules over the course of that decade. Most to the benefit of the UK Chancellor or to Chequer!

My 5 years as CEO of Cameron James, have certainly been the most rewarding. My goal, has been a simple one. Provide clients with transparent financial advice on a low-cost basis, for them to make informed decisions to protect their families best interests.

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