Guidance

Overseas pensions: pension transfers

How qualifying recognised overseas pension scheme (QROPS) managers report pension transfers and when tax needs to be paid.

• From: HM Revenue & Customs
• Published: 5 December 2016
• Last updated: 6 April 2024 — See all updates

You must tell HMRC about pension transfers to or from your qualifying recognised overseas pension scheme (QROPS) that have received UK tax relief. You also need to provide information to the scheme manager or administrator who’s receiving the transfer.

You still need to report this information if you manage a former QROPS.

Your pension scheme can lose its QROPS status if you do not provide this information within the time limit. Former QROPS may get an initial penalty of £300 and a daily penalty of up to £60 until they provide this information.

When transfers are taxed

You need to check if an overseas transfer charge needs to be paid when pension savings which have received UK tax relief are transferred.

You’re jointly responsible with the scheme member for making sure that the correct tax is paid on transferred pension savings that have received UK tax relief.

Transfers to a QROPS

Pension transfers from a QROPS (or former QROPS) to another QROPS may be liable to an overseas transfer charge of 25% of the amount that’s being transferred.

The overseas transfer charge can apply to transfers requested on or after 9 March 2017:

• that include funds that came from a transfer (known as the original transfer) from:
  • a registered pension scheme
  • an overseas pension scheme where the member’s pension funds have received UK tax relief
• where the transfer from the QROPS (or former QROPS) is made within five full tax years of the original transfer into the scheme
• where the member has exceeded their overseas transfer allowance

The overseas transfer charge does not apply to the part of a transfer that includes pension savings:

• held under the scheme before 9 March 2017
• where the overseas transfer charge was paid on a previous transfer (and has not been refunded by HMRC)

The overseas transfer charge does not apply to the transfer if the member has sufficient available overseas transfer allowance and the scheme member has provided information in advance of the transfer which shows:

• they’re a resident of the country that the QROPS receiving the transfer is based in
• they’re a resident of the UK, Gibraltar or a country in the European Economic Area (EEA) and the QROPS is based in Gibraltar or an EEA state
• the QROPS is an occupational pension scheme and the member is an employee of a sponsoring employer under the scheme at the time of the transfer
• the QROPS is an overseas public service scheme and the member is employed at the time of transfer by an employer that participates in that scheme
• the QROPS is a pension scheme of an international organisation and the member is employed at the time of transfer by that international organisation

Transfers to an overseas pension scheme that is not a QROPS

Transfers of pension savings to an overseas pension scheme which is not a QROPS will be treated as an unauthorised payment and the scheme member may be charged at least 40% tax.

Information you need to get from your scheme member

You need to ask your scheme member to give you information about the transfer within 30 days of the transfer request.

You use form APSS255 to request this information from your scheme member.

Your scheme member has 60 days from their transfer request to give you this information. If they do not, you must deduct the overseas transfer charge (where it applies) if you make the transfer.

What to report to HMRC

You’ll need to tell HMRC within 90 days about any pension transfers from your scheme if either:

• it’s less than 10 years since the funds were transferred from a registered pension scheme or another overseas scheme where the member’s pension funds have benefited from UK tax relief
• your scheme member:
  • is a UK resident
  • has been a UK resident at any time in the past 5 tax years — or at any time in the past 10 tax years if the extended time limit applies

The extended time limit applies to transfers on or after 6 April 2017 received from:

• a registered pension scheme
• an overseas pension scheme where contributions to that scheme have benefited from UK tax relief

You need to tell HMRC whether or not the overseas transfer charge applies. You can use form APSS253 to do this. If the overseas transfer charge needs to be paid, once you report it, HMRC will tell you how to pay the tax.

You’ll also need to tell HMRC if the scheme member’s circumstances change within 5 tax years of the transfer, and the overseas transfer charge needs to be paid as a result. You can use form APSS244 to do this.

What to report to the new scheme administrator or manager

The information you need to give to the new scheme administrator or manager depends on whether pension savings are being transferred to a registered pension scheme or another QROPS.

Transfers to a registered pension scheme

You need to tell the new scheme administrator within 91 days of the transfer from your scheme if the scheme member has:

• received a lump sum payment from their pension savings (the equivalent of ‘uncrystallised funds pension lump sum’)
• started taking money from pension savings that have been invested to give an adjustable income (the equivalent of ‘flexi-access drawdown pension’)

Transfers to another QROPS

You need to tell the new QROPS manager within 91 days of the transfer:

• the amount of any pension savings included in the transfer that have received UK tax relief since you started managing it — state the amounts built up before 9 March 2017 and since 9 March 2017
• the period in which the overseas transfer charge applies for the transfer (the relevant period) — where the transfer includes more than one source of pension savings that have received UK tax relief, give the relevant period for each source
• if the scheme member has received a lump sum payment from their pension savings, the equivalent of ‘uncrystallised funds pension lump sum’
• if the scheme member has started taking money from pension savings that have been invested to give an adjustable income (the equivalent of ‘flexi-access drawdown pension’)
• the value of the ‘relevant transfer fund’ included in the transfer from a registered pension scheme (or a non-UK scheme that has benefited from UK tax relief), which includes:
  • transfers from a registered pension scheme made before 9 March 2017
  • pension funds under another QROPS that received UK tax relief where the transfer was made before 9 March 2017
  • pension funds that received UK tax relief held under an overseas scheme that was not a QROPS when the transfer was made, and the transfer was made before 6 April 2017
• the value of each of the member’s ‘ring-fenced transfer funds’ included in the transfer value which includes:
  • transfers from a registered pension scheme made on or after 9 March 2017
  • transfers from another QROPS of funds that received UK tax relief made on or after 9 March 2017
  • transfers of funds that received UK tax relief from an overseas scheme that was not a QROPS when the transfer was made, and the transfer was made on or after 6 April 2017
  • an onward transfer of any one of the previous three types of transfer
• if you are aware that any of the relevant transfer fund or ring-fenced transfer fund originates from a UK registered pension scheme, and if known, the date:
  • of the original transfer of those UK tax-relieved pension savings from the registered pension scheme
  • the original transfer from the registered pension scheme was requested

You also need to tell the new QROPS manager whether an overseas transfer charge of 25% applies.

If the overseas transfer charge applies, tell the new QROPS manager the amount of the transfer that must be taxed and the amount of tax that needs to be paid.

If it does not apply, tell the new QROPS manager why the transfer was tax free. If it’s tax free because a charge was paid on a previous transfer, give details of the previous charge.

What to report to the scheme member

If an overseas transfer charge applies, you must tell the scheme member within 90 days of the transfer:

• the date of the transfer
• that an overseas transfer charge applies to the transfer
• the amount of the transfer that’s subject to the overseas transfer charge
• the amount of the member’s overseas transfer allowance used up by the transfer
• the amount of tax that needs to be paid
• if the tax has been paid — state how much you’ve paid and the date you paid it
• if you intend to pay the charge — state the amount you’ll pay

If an overseas transfer charge does not apply you must tell the scheme member within 90 days of the transfer:

• the date of the transfer
• that the overseas transfer charge does not apply to the transfer
• the reason why the overseas transfer charge does not apply

If the charge does not apply because the individual is resident in the same country as the QROPS or the individual is resident in the UK, Gibraltar, or a country within the EEA, and the scheme is based in the EEA or Gibraltar, you must tell the scheme member within 90 days:

• when the period in which the overseas transfer charge may apply ends (known as the relevant period)
• how the tax charge may apply within that period

Transfers into your scheme

You do not need to report transfers into your scheme, but HMRC might ask you for information about the pension savings you’ve received.

The scheme manager or scheme administrator transferring the pension savings to your QROPS will tell you if the overseas transfer charge applied and how much tax was paid. They’ll also tell you if the transfer was not taxable and the reason why.

Keep this information for 5 tax years after the date of the transfer in case the scheme member’s circumstances change and overseas transfer charge needs to be paid or repaid.

Claim a refund of the overseas transfer charge

Use form APSS243 to claim a refund from HMRC where the overseas transfer charge:

• was paid in error
• should be repaid because of a change in the scheme member’s circumstances

Published 5 December 2016
Last updated 6 April 2024 + show all updates

1. 6 April 2024

   Updated rules for when an overseas transfer charge applies, as well as what to report to the scheme member.

2. 9 February 2018

   More information about the overseas transfers charge and the conditions that apply has been added.

3. 6 April 2017

   Amendments made following changes to the pension tax rules for overseas pension schemes, that take effect from 6 April 2017.

4. 8 March 2017

   Updated guidance to include information regarding the overseas transfer charge.

5. 5 December 2016

   First published.