3. Transferring to an overseas pension scheme
You may be able to transfer your UK pension savings to an overseas pension scheme.
Schemes you can transfer to
The overseas scheme you want to transfer your pension savings to must be a ‘qualifying recognised overseas pension scheme’ (QROPS). It’s up to you to check this with the overseas scheme or your UK pension provider or adviser.
If it’s not a QROPS scheme, your UK pension scheme may refuse to make the transfer, or you’ll have to pay at least 40% tax on the transfer.
Tax when you transfer to a QROPS
Whether you pay tax depends on where the QROPS scheme you transfer to is based. It’s your responsibility to find out where this is.
You don’t have to pay any tax if you asked for a transfer to a QROPS scheme before 9 March 2017.
You usually don’t pay tax if you transfer to a QROPS scheme provided by your employer. Check with the scheme to find out.
You transfer to a QROPS scheme based in the European Economic Area (EEA)
You pay 25% tax if you either:
- live outside the EEA
- move to live outside the EEA within 5 years
Otherwise you don’t pay tax.
You can get tax refunded if you move to an EEA country within 5 years of the transfer. To claim, tell your scheme’s administrator you’ve moved using form APSS 241 - they’ll put the money back in your pension.
You transfer to a QROPS scheme based outside the EEA
You don’t have to pay tax if you live in the country your QROPS scheme’s based in. Otherwise you’ll have to pay 25% tax.
If you move countries within 5 years of the transfer, fill in form APSS 241 and give it to your scheme administrator. You’ll:
- get a refund if you’ve moved to the country your QROPS scheme’s based in
- have to pay 25% tax on your transfer if you’ve moved away from the country your QROPS scheme’s based in
How to transfer
Form APSS 263 tells you what information you’ll need to provide before making a transfer.
Download and fill in the form and give it to your UK pension scheme administrator.
Your transfer will be taxed at 25% if you don’t provide all the information the form asks for within 60 days of requesting the transfer.
If you’re under 75, your UK pension scheme administrator will work out what percentage of your lifetime allowance is used by the transfer.
They’ll tell you if the amount you’re transferring is more than your allowance and if you’ll be taxed on it.
Payments from an overseas pension
You may have to pay UK tax on some payments from your overseas scheme. This depends on when you were a UK resident.