Article Summary

What is a QROPS?

It stands for a Qualifying Recognised Overseas Pension Schemes (QROPS)​

A QROPS is an overseas pension scheme that meets Her Majesty’s Revenue and Customs (HMRC) requirements.

QROPS have existed since 6th April 2006, when the UK brought in pension legislation in response to an EU requirement on the freedom of capital movement. The goal was to help simplify pension planning for those living overseas with UK pensions.

How does a QROPS work?​

A QROPS functions in the same way as your existing pension

It is a tax-free wrapper that allows you to hold and invest assets that will then be utilised to provide you with a retirement income. QROPS operate beyond UK tax laws and thus potentially shield investors from possible future changes in UK pension regulation. They can be very beneficial, depending on your situation. In terms of investments, a QROPS can hold most types of investments, very much similar to what can be held within a UK pension. The only notable exception, just like a UK Pension, is residential property.

What is a QROPS transfer?​

The consolidation of your UK pensions into a recognised overseas pension scheme. You can achieve this by requesting, completing and submitting a ‘transfer-out pack’ from your existing pension provider. QROPS are highly regulated, so your current pension provider will require several additional forms to satisfy their compliance processes. Completing a QROPS transfer can be very time-consuming, but we try to keep it as simple and streamlined as possible for the client, when we advise and implement a QROPS transfer.

The following article from the Financial Times (2019) outlines some of the background we look after and complete for our clients.

Why use a QROPS?​

You should consider a QROPS if you are an EEA resident with substantial UK pension assets. Whilst the LTA has been abolished, there is a decent likelihood that it will be brought back at a later date by a new government, in some form or another. It may not go back to what it was, but is certainly likely to be at most £1.5m/£1.8m, which is originally what it was expected to be before Jeremy Hunt blind sided everyone with the complete abolishment of it.

If your UK pensions are currently in excess of £1.5m, or projected to be in excess of £1.5m in the not too distant future, then a QROPS could potentially be a suitable course of action for you.

There are, of course, many factors to consider, but the above is a basic premise. If you do not match the above criteria, then consolidation of your pensions into a SIPP is likely the more suitable advice, as they are typically more affordable and regulated by the FCA.

However, the rules and treatment of UK pensions by foreign governments is subject to change, and there are some foreign governments already starting to turn an eye to UK pensions, and how they are treated, with France being one such example. Whilst there aren’t any reasons to choose a QROPS over a SIPP due to government treatment just yet, it does not mean that it won’t be in the future.

Inevitably, if you are a US Resident, you might be attracted to consolidate your US and UK pensions into your 401k or IRA. However, transferring a UK pension to 401k is not possible for US residents.

More information about HMRC QROPS FAQ and QROPS Example (study cases) can be found here.

QROPS Advice Process

Simple and Straightforward

Contact Us

Gathering of Facts

Situation Analysis

Solution Appointment

Complete Application

Ongoing Reviews

Advantages of QROPS

Future Proofing potential LTA Charge

Whilst the LTA has been abolished, there is a decent likelihood that it will be brought back at a later date by a new government. It may not go back to what it was, but is certainly likely to be at most £1.5m/£1.8m. Avoiding this future potential hefty tax bill is arguably the most significant advantage of a QROPS, even if it costs slightly more on an annual basis. For investors resident in the EEA with pension savings well over £1m, either now or likely to be during retirement, then a transfer could save them a considerable amount of tax in the future, or at least remove the worry of any potential bill in the future.

Maximise Spouse Pension

In the event of your death, a Final Salary or Defined Benefit scheme will likely only pay your spouse a pension of up to 50% of your annual pension. If your spouse passes away, this 50% payment stops. A QROPS allows you to nominate any number of beneficiaries, including spouses, children, family or friends. In the event of your death, 100% of your pension value passes onto your named beneficiaries. A QROPS has death benefits very similar to a UK defined contribution pension, so is incredibly flexible, and makes estate planning simpler.

Beyond UK Rules

The UK pension legislation does not govern QROPS directly. So QROPS transfers protect investors against any future changes in UK pension legislation. UK pension rules changes must be enacted within a QROPS in order for it to remain a QROPS and open to new members, but if the Scheme does not update its rules and no longer has QROPS Status, the Scheme can remain active for existing members, with all the provisions as originally set out in the Trust/Contract Deed. 

However, QROPS holders in the EEA must note that they would fall back into UK legislation and taxation if they moved to another unapproved QROPS scheme. Additionally, if they moved beyond the EEA within five years of the transfer, they could be subject to an Overseas Transfer Charge (OTC).

Investment Choice

QROPS provide investors with greater freedom over how they wish to invest their portfolio in comparison to many UK pension schemes, especially workplace schemes. However, a broader choice does not automatically mean better performance. But, for many investors, this can help to reduce overexposure to UK assets. Cameron James has a simple investment philosophy, and all of our portfolios can be invested in within almost all, if not all, UK SIPPS and QROPS.


Your UK pension provider, especially if a workplace pension, will likely only allow you to invest in GBP. Inside a QROPS though, you have the freedom to move your pension into other currencies. Some expats prefer to match their pension to the currency of their retirement country. It helps to avoid currency fluctuations and to help better plan their retirement income needs, as there is no need to account for exchange rate changes.

Tax Benefits

Capital gains tax does not apply to the growth of your investments within a QROPS. So, like your UK company pension, final salary pension, or defined contribution pension, you will not face taxes on any growth. In some instances, QROPS allows for a 30% tax-free lump sum, as opposed to the 25% maximum in the UK. On a pot of £1m for example, this creates an additional tax-free income of £50,000, but that will depend on the tax rules within the country you are tax resident at the date of withdrawal.

Local Tax Rates

If your country of residence holds a Double Taxation Agreement (DTA) with your QROPS jurisdiction (typically Malta), your QROPS provider can pay you gross income from your QROPS. You are then free to pay your local taxes in your country of tax residency. Extensive DTAs are why Malta is one of the longest standing and well regarded QROPS jurisdictions. Along with its EEA status, which means no OTC 25% tax is applied to any transfer so long as the client is also resident in the EEA.


From Age 55, you can decide when and how much you wish to withdraw from your QROPS. There are no obligations to purchase an annuity. Some investors prefer to take a higher income during their early retirement years to enjoy their more active years. Others prefer to take their 25% tax-free PCLS and take the remainder gradually. You are free to decide withdrawals at any point, and your financial adviser will help you plan those withdrawals, alongside your wider retirement goals and planning needs.

UK Residents

QROPS are one of the most underutilised financial planning tools available in the UK. Mainly because UK Advisers typically have little or no knowledge of QROPS. However, there is a small pocket of well-informed UK advisers who understand QROPS quite well, and are able to advise UK Residents on it. They have been utilised extensively in places like the City of London, where banking pension pots often breached the old LTA mark. This topic is an entire article in itself.

Final Salary Schemes

Most people refer to Final Salary or Defined Benefit (DB) schemes as being gold-plated. And whilst it is true that DBs have great value, and a client may be worse off by transferring into a QROPS, most of these offshore schemes can accept a DB Transfer, and allow a client to manage their pension benefits flexibly whilst residing abroad.

Disadvantages of QROPS

Potential 25% Tax Charge (OTC) Outside The EEA

QROPS were introduced to create an even playing field for non-UK residents with UK pensions. However, HMRC believed some were primarily using QROPS to avoid UK tax and access their pensions early. On the 9th March 2017, a 25% Overseas Transfer Charge (OTC) was declared on any transfers where the client is resident outside the country or jurisdiction of the QROPS. There are some negligible exceptions to this. Some suggest this 25% tax will also apply to transfers in the EEA eventually after Brexit, although nothing has been announced as yet. As such, a small window of opportunity may exist for EEA residents who could benefit from a QROPS.

Bad Financial Advice

A broader investment choice is not a bad thing. However, we have seen instances where Financial Advisers have placed a QROPS client in a high-risk structured note beyond their level of understanding or into risky or illiquid investments. The same has happened in UK pensions, especially SIPPS, as well, in fact many times more bad advice has been made within a SIPP than a QROPS, but it is still a far too common issue in previous QROPS transfers we review. It is vital to ensure your QROPS portfolio is in line with your attitude to risk and return. Never be afraid to directly ask your Adviser if they are receiving any form of inducement or commission to place you in a particular asset or fund. Even better, ask for this in writing. Adviser commission is a key driving factor in bad financial advice outside the UK, as advisers become motivated by the provider paying the highest commission, rather than motivated by helping the client.

Exhausting Your QROPS

QROPS provide clients with access from Age 55 and can provide greater control over their retirement. However, there is an obvious danger here that clients could exhaust their pension savings too early. Technically, there is nothing to stop a client withdrawing all of their QROPS on their 55th birthday. While we would typically advise against this, there would be nothing the QROPS provider, or we, could do to stop them.

Potential QROPS Deregistration

Just because a scheme currently qualifies as a QROPS provides no guarantee that it will continue to do so moving forward. QROPS providers must re-notify HMRC every 5-years that they are continuing to be a QROPS. Any reputable QROPS provider is not going to forget to complete its most important piece of admin every 5-years, but it highlights a point. That is why we only use QROPS providers with a strong track record, and in jurisdictions with robust regulations, like Malta.

Not Available for US Connected Persons

US residents should not waste time over assessing a QROPS vs SIPPS. An International SIPP is the only reasonable option for UK pension holders who live in the USA, due to the 25% OTC. 

Cameron James has a vast level of experience in dealing with US-based clients transferring into an International SIPP. We are happy to discuss UK pension transfers to USA, overseas pension, or your retirement planning in general.

Are QROPS Good?

QROPS can be an extremely valuable financial planning tool.

Statements such as ‘all QROPS are bad’ or in the more distant past ‘all QROPS are bad’ are misleading and unfounded. A QROPS can be an excellent and highly valuable financial planning tool. At the same time, they can be used to terrible effect, causing serious damage to a client’s pension and family wealth. For example, a client living in France with a £1.5m UK pension could be advised a QROPS and invest in a well-diversified portfolio, creating huge tax savings and excellent returns. In contrast, a client in Dubai with a £1.5m UK pension could be advised a QROPS, pay a 25% OTC Charge, and then be invested into an undiversified, high cost and high-risk portfolio, leading to financial catastrophe. 

Are QROPS taxable to US residents?

As we mentioned earlier, US residents cannot transfer their UK pensions to a QROPS. The QROPS scheme is viable only to those living in the European Economic Area (EEA) countries or in one of the other recognised QROPS countries outside the EEA. 

A QROPS might be an option if you plan to return to the UK and spend your retirement there. The reason for this is because, at the moment, QROPS holders are still exempt for LTA charges and, whilst the LTA is currently abolished, there is a very good chance that it will come back with a new government, in some form or another.

So, during your years in the US, you can access your retirement fund using the international SIPP and, if suitable, transfer it to QROPS once you decide to move back to the UK. Please do not hesitate to contact our team for further discussion regarding the matter.

Who is a US Connected Person?

Somebody may not realise their status as a US connected person. Therefore, you have to examine your status carefully, as the US government requires all US citizens working and residing abroad to file and report on their worldwide income. If that is the case, you must file a complaint-US tax return, including investment income.

  • Individuals are considered US connected if any of these criteria apply:having a Green Card or another visa and living in the states;
  • being an American tax resident;
  • holding a US passport;
  • or being a citizen due to one parent holding a US passport, even if you were born overseas.

It is estimated around 10 million US citizens are living abroad. Once you are fully sure about your US citizenship, you may have to consider your retirement plan. If you have been working or living in the UK and planning to return to the US, you should consider how to transfer your pension, since you cannot transfer your UK pension using a QROPS to the USA. 

Are QROPS a scam?

You should not proceed with the transfer advice if you doubt your Adviser’s integrity​.

  • “My expat neighbour told me QROPS are a scam.”
  • “My expat colleague told me QROPS are a scam, and he lost all his money.”
  • “My UK IFA told me QROPS are a scam and only sold by unscrupulous offshore Advisers on high commission.”

We can confirm that none of the above statements are true, but like many things, where this smoke, there is a fire, so making sure you have a properly regulated and trustworthy adviser is of paramount importance.

They are indeed things we have heard clients say before, though – as many clients have experienced this in the offshore market. As outlined in the above “Are QROPS Good”, they can be used to great or terrible effect. This is dependent on your own situation, and what adviser is advising. That is why taking regulated advice from an experienced and qualified Adviser is essential. You should not proceed with a QROPS transfer if you have any doubt about your Adviser’s reasons for recommending one.

How long does a QROPS transfer take?

A QROPS transfer usually takes longer than other UK pension transfers or switches. A QROPS transfer increases the complexity of paperwork that the Adviser & Client need to submit, and the amount of admin the UK pension team needs to complete. That is because the UK pension provider has additional checks to complete. Additionally, QROPS providers cannot utilise the Origo Transfer System (an electronic transfer out system), which means you must always submit physical transfer out forms. The quality of Adviser paperwork is essential in minimising QROPS transfer times. As such, we pre-complete all application forms and documents for clients to review and sign, saving our clients time and reducing errors, which can lead to significant delays.

Are QROPS low cost? What is the LTA?

QROPS are not low cost, but can save you tax.

QROPS are not a low-cost solution. They are a more expensive financial planning tool than a SIPP. For example, on a £250k transfer, a QROPS provider can charge a set fee of £645 with an annual fee of £895. The 10-year cost equals £9,595. On a £250k transfer, an International SIPP provider can charge a set fee of £0 with an annual fee of £180. The 10-year cost equals £1,800. A QROPS is £7,795 more expensive over 10-years. All prices exclude VAT.

So why would anyone choose a QROPS? Say an EEA resident client had a £1.1m UK pension pot with the old Lifetime Allowance of £1.055m. That means any growth in the pension would attract an LTA charge of 25%. If we assume a net annual growth rate of 5% pa, the client’s portfolio of £1.1m will grow by £55,000 per annum. In year one, this would create an LTA tax liability of £13,750. Compounded over 10-years, this would generate an LTA tax charge to HMRC of £163,182.78 as highlighted on the right.

So, although the QROPS solution might be more expensive, it may have significant tax savings in the long-run. At present, due to the abolition of the LTA, this tax saving is no longer possible, but if reinstated, than LTA tax savings could again be potentially substantial.

QROPS Financial Planning Tool and LTA

How are QROPS taxed?​

There is no tax on growth or income within the QROPS wrapper. Taxes are only applied to withdrawals taken from the QROPS. Same as a UK Pension.

Like any UK pension, there is no tax on the growth within QROPS. However, a tax applies when money is withdrawn from the QROPS. That is the same for every UK pension. As such, when you take withdrawals or pension income from your QROPS, you must declare this income on your tax return in your country of residence. If a Double Taxation Agreement (DTA) is in place between your QROPS jurisdiction and country of residence, then your QROPS provider might make the payment gross of tax. Currently, Malta has 71 DTAs in place, which includes the many of the most popular Expat retirement locations. It is what makes Malta one of, if not the, most influential and key QROPS jurisdictions for most clients.

Can I transfer my QROPS back to the UK?

Yes. The process is simple, and it is a growing trend.

After their inception in 2006, QROPS was the buzzword in expat financial planning. Expats globally were advised by their IFA to transfer their UK pension to a QROPS. There was a rule of thumb that if you were outside the UK and not intending to go back, then QROPS was the answer.

For many clients, this would have been useful advice. However, for others, this would have been unsuitable. The increased costs of a QROPS did not outweigh the benefits of utilising an International SIPP, as they were in little danger of exceeding their LTA. Many QROPS clients could significantly reduce their costs by transferring their QROPS back to an International SIPP.

With annual QROPS fees of up to £2,500 and annual International SIPP fees as low as £180, a client could reduce their annual trustee costs by over ten times, which would result in a 92.8% saving. These savings would add £23,200 to the value of their pension pot over the course of 10 years, without taking into account the effects of compounding, which would make the additional growth obtained even greater.

Furthermore, all Advisers have heard clients say ‘I am never going back to the UK’. That is true until something changes: your career, your health, your spouse, or just wanting to be closer to your parents or grandchildren. For many, this is the catalyst of researching what to do with their QROPS. Our Advisers have helped numerous clients reduce their costs and transition their pension back into a UK scheme.

Can I transfer my QROPS to another QROPS?

Yes, and you could reduce your costs.

Clients often ask how they could reduce the costs of their QROPS. Many expats have been correctly advised to transfer into a QROPS in the past. QROPS have existed for well over a decade, so this may have been some time ago. For one reason or another, you have lost contact with your original Adviser. Perhaps you moved, they moved, or you were unhappy with the service.

The QROPS market has greater competition now than before. This is better for clients as it has driven down the fees in the market. So you may be in a QROPS, which is the correct option, but your annual QROPS fees are excessive in comparison to other providers. With annual QROPS fees on a £250k pension being as high as £2,500 and as low as £895, a client could reduce their annual QROPS costs by more than half. They are saving themselves £16,050 over the course of 10 years, and even more if the funds grow.

While the possible cost savings are attractive, some clients may also complete a QROPS to QROPS transfer due to their current QROPS jurisdiction being outdated. That would allow them to choose a QROPS jurisdiction such as Malta which may be more secure, and more in line with UK pension freedom rules.

What is the HMRC QROPS list?

The HMRC QROPS list gets updated on the 1st and 15th of each month. It is a List of the schemes that have notified HMRC that they fulfil the conditions to hold an overseas pension scheme title.

Importantly, though, HMRC cannot guarantee that the schemes on the list are indeed recognised overseas pension schemes and are not liable for any information on the website. That causes some confusion for expats but makes sense. For example, a QROPS provider could do something contradictory to the HMRC’s QROPS requirements, but they could not know this information in real time, so it will take time for that new to filter through to HMRC to investigate, and then update the register should they deem them to have actioned something that requires them to be delisted as a QROPS.

How should I use the HMRC QROPS list?

Check if your QROPS provider is there.

The first thing to do when receiving QROPS advice is to search and check if the QROPS provider your Adviser is recommending is on the HMRC QROPS list. The list is organised in A to Z by jurisdiction. If you are uncertain, ask your Adviser to confirm the location of the QROPS or get in touch with us.

Each country then lists the providers who have notified HMRC. Search for the name of your QROPS provider. In this instance, we searched for Malta. If your proposed QROPS provider is on the list, then this is undoubtedly a good start as it proves the company is at least in contact with HMRC.

You will still need to discuss this with your Adviser. Along with asking them to confirm that your QROPS is in line with HMRC’s requirements and that it is a recognised overseas pension scheme. If you are unsure, you can Contact Us.

QROPS Provider List

Malta QROPS for US Residents ​

Malta is the leading jurisdiction for QROPS providers in the world. There has been a significant reduction in terms of the numbers of QROPS providers all around the world, because they are not complying with the UK Government QROPS rules, whether because they are unable to do so, or are unwilling to do so. Malta is currently the most common and most specified QROPS market in the world. You can watch the complete explanation of QROPS Malta on our YouTube video below.

Is Cameron James on the QROPS list? ​ ​

No. We are not a QROPS provider.​

We provide our clients with financial planning and advice. i.e, which QROPS provider is most suited to your unique requirements. A QROPS provider will replace your UK pension provider such as Aegon, Scottish Widows or Mercer. We only pick QROPS providers which appear on the HMRC’s QROPS list, as well as those with a reputable name and positive, historical track record. We then advise our clients on all, holistic financial planning matters on an ongoing basis, including investment strategy, withdrawals, and much more.

How do I transfer my pensions into a QROPS?​ ​

The transfer is simple. The advice is more complicated.​

So when we say simple, we mean in relative terms. The transfer process is bureaucratic and slow, but from experience, our Advisers and Admin know the process back to front, and most importantly, how to navigate it effectively. However, receiving the correct advice on your transfer is more complicated. It is an important decision which could positively impact your wealth, so you must do your homework on your Adviser.

How do I take money out of my QROPS? ​

Your adviser helps you.

Your financial adviser will be able to help you plan and map out your withdrawals ahead of time, through constant, ongoing communication. 

What is the difference between a QROPS vs SIPP?

A QROPS can provide clients with more flexibility and control over their UK pensions, especially if they are resident outside the UK.

An International SIPP is similar to a QROPS in the respect that it is a tax-deferred environment for non-UK residents to consolidate their UK pensions. It provides clients with more flexibility and control over their UK pensions.

If you are resident outside the EEA, then an International SIPP would almost certainly be the preferable transfer solution for you instead of a QROPS. Moreover, if your pension pot does not exceed the level you might expect the LTA to be brought back at, say £1.5m, an International SIPP would likely be the more suitable option for you.

Qualifying Recognised Overseas Pension Scheme

If you are an EEA resident with a large pension pot, but planning to move beyond the UK or EEA within 5-years, then an International SIPP would again be more suitable. International SIPPs have lower set-up and annual costs than a QROPS. On a typical example of a £250k UK pension, an International SIPP would be £7,795 cheaper for you than a QROPS solution over ten years. You should only utilise a QROPS if the benefits outweigh the costs. If you think a SIPP is more suitable for your needs, learn more on our International SIPP page.

What happens to your QROPS when you die?

100% of your QROPS passes to your beneficiaries.

In summary, a QROPS is subject to the same death rules as a UK Defined Contribution pension. For example, If your QROPS is worth £250k, in the event of your death, the £250k will be passed on to your beneficiaries tax-free if you die before 75, or at your beneficiaries marginal rate of income tax if you die after 75. 

Should I transfer my pension into a QROPS?

This depends on your situation.

Several factors could make a QROPS transfer suitable for you. There are two vital considerations. Firstly, if you are an EEA resident and your pension pot exceeds the old LTA. Secondly, if you have no intention of moving away from the EEA over the course of the next five years and will remain an EEA resident.

Good quality QROPS advice is essential if you are considering a transfer. Even if you decide against obtaining advice on the Suitability of a QROPS, it will have been a valuable exercise understanding why it may not have been suitable for you.

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.

Our Clients Love Working With Us!

We have worked hard for our reputation and we will be maintaining it.

5.0 Star Rating