PTM102350 - Transfers: transfers to a QROPS: examples of when a transfer is not subject to an overseas transfer charge
Glossary |
Example of a transfer to an occupational pension scheme
Example of a transfer to a QROPS set up by an international organisation
Transfer from a relieved relevant non-UK scheme that is a block transfer
Onward transfer from a QROPS – out of scope of the tax charge
Onward transfer from a QROPS – exclusion example 1
Onward transfer from a QROPS – exclusion example 2
Onward transfer from a QROPS – exclusion example 3
Example of a transfer to an occupational pension scheme
Emily works for Catz International and has benefits under the Baggy QROPS which was set up by her employer. Emily also has benefits under the Woodpecker Pension Scheme from a previous job in the UK. Emily asks the scheme administrator of the Woodpecker Pension Scheme to transfer her pension rights to the Baggy QROPS.
Having got details of the receiving scheme the Woodpecker Pension Scheme makes the transfer. However at this point Emily has not provided all the required information (see PTM102900). This means that despite the Baggy QROPS being an occupational pension scheme and Emily being an employee of a sponsoring employer, the transfer is subject to an overseas transfer charge under section 244AC.
Emily later provides the scheme administrator of the Woodpecker Pension Scheme with the required information. This means that the exclusion condition has now been met and the scheme administrator of the Woodpecker Pension Scheme can reclaim the tax paid on the section 244AC charge due to a change in circumstances as set out at PTM102600. (Note
that this example assumes that the ‘transferred value’ was less than Emily’s
available overseas transfer allowance.
If the transferred value were above her available overseas transfer
allowance, the excess would be subject to an overseas transfer charge under
section 244IA when the section 244AC charge became repayable. There is an example of this at PTM102400).
Example of a transfer to a QROPS set up by an international organisation
Dougal has pension savings under the Happy Personal Pension Scheme. Dougal starts a new job working for the European Commission and as a result joins their pension scheme. Having provided the transferring scheme administrator with the required information and acknowledgements, Dougal transfers his pension rights from his personal pension to his new employer’s scheme. This pension scheme is a QROPS and was set up by an international organisation to provide benefits for their employees.
As Dougal was an employee when he transferred his pension savings the transfer is excluded from an overseas transfer charge under section 244AC. (Note that this example assumes that the ‘transferred value’ is less than Dougal’s available overseas transfer allowance. If the transferred value were above his available overseas transfer allowance, the excess would be subject to an overseas transfer charge under section 244IA. There is an example of this at PTM102530).
Transfer from a relieved relevant non-UK scheme that is a block transfer
Rainer lives in Brazil and has pension savings of £450,000 under a relieved relevant non-UK scheme (RNUKS). In August 2024, all of Rainer’s savings under the RNUKS are transferred to a QROPS based in Italy as part of a block transfer (see PTM102200). As it is a block transfer, this transfer is not subject to an overseas transfer charge, even though it may not meet any of the exclusion conditions. However, if there is a subsequent onward transfer from the QROPS, this will be within scope of an overseas transfer charge (see PTM102550 for an example).
Onward transfer from a QROPS – out of scope of the tax charge
Florence transferred her pension savings under the Roundabout Registered Pension Scheme to the Magic QROPS in March 2018. In September 2025 Florence transfers from the Magic QROPS to the Rainbow QROPS. The transfer to the Rainbow QROPS is not subject to an overseas transfer charge. This is not because it meets one of the exclusion conditions, but because the transfer is out of scope of the 'relevant period' set by section 244AB(1) Finance Act 2004.
The transfer to the Rainbow QROPS is an onward transfer, with the original transfer being the transfer from the Roundabout Registered Pension Scheme made in March 2018. The transfer to the Rainbow QROPS was not made in the relevant period for the original transfer and so is not within scope of an overseas transfer charge.
Onward transfer from a QROPS – exclusion example 1
Hector transferred his pension rights from the ABC registered pension scheme to QROPS 1 on 4 July 2014. In March 2016 Hector transferred these rights from QROPS 1 to QROPS 2. In September 2017 Hector transfers these rights to QROPS 3. The transfer of Hector’s pension rights to QROPS 3 is an onward transfer, but it is excluded from an overseas transfer charge because:
- the funds being transferred are pre-9 March 2017 funds. The original transfer is the transfer from the ABC registered pension scheme made on 4 July 2014, and
- the funds being transferred do not relate to a ring-fenced transfer fund. It is a relevant transfer fund that is being transferred.
Onward transfer from a QROPS – exclusion example 2
Geoffrey has £400,000 under The Hippo QROPS. Of these funds £250,000 is a ring-fenced transfer fund and £80,000 is a UK tax-relieved fund. Whilst resident in the UK Geoffrey transfers all his funds to The Bear QROPS, which is established in Guernsey and is not employment-related. Geoffrey’s transfer includes an onward transfer that is subject to the overseas transfer charge. Of the total £400,000 transferred £150,000 cannot be subject to the overseas transfer charge as it is not made out of the Geoffrey’s ring-fenced transfer fund.
Onward transfer from a QROPS – exclusion example 3
Brian transfers £100,000 from the Snail Pension Fund to the Zippy QROPS on 29 June 2025. That transfer was subject to an overseas transfer charge under section 244AC and the scheme administrator of the Snail Pension Fund paid the £25,000 tax due to HMRC and transferred the balance of £75,000 to the Zippy QROPS.
Following the transfer Brian has £180,000 in the Zippy QROPS including:
- £75,000 ring-fenced transfer fund with a key date of 29 June 2025, this was subject to the tax charge
- £90,000 ring-fenced transfer fund with a key date of 15 September 2024, this wasn’t subject to the tax charge
In April 2027 Brian's funds are now worth £250,000 and he decides to transfer them to the Hartley H QROPS. This scheme is not employment-related, is not based in the EEA or Gibraltar and Brian is not resident in the same country as that in which the Hartley H QROPS is established. As a result at least part of the transfer will be subject to an overseas transfer charge under section 244AC.
The tax charge applies only to the extent that transferred funds relate to a ring-fenced transfer fund.
Brian transferred two ring-fenced transfer funds, but as the overseas transfer charge was paid in respect of the transfer that created the £75,000 ring-fenced transfer the onward transfer of that fund is excluded from the tax charge.
As a result of the £250,000 transferred, only the transfer of the £90,000 ring-fenced transfer fund is subject to the overseas transfer charge.