QROPS List: What It Is, Who Qualifies, and Why UK Expats Must Check It

This guide explains what the QROPS list is, why it matters for UK expats, the eligibility requirements for inclusion, and how to select a suitable scheme.

What Is the HMRC QROPS List?

The HMRC QROPS list is a published record of Recognised Overseas Pension Schemes (ROPS) that have notified HMRC they meet the required criteria for becoming a QROPS and have requested to be included in the list.

The list, updated twice monthly, enables advisers and scheme members to verify that a pension scheme has made the necessary notification to HMRC.

However, inclusion does not constitute approval or endorsement by HMRC. It does not confirm the scheme’s ongoing compliance with QROPS rules.

Individuals should seek professional advice and conduct thorough due diligence before initiating any transfer, as failure to meet QROPS criteria can lead to severe tax consequences.

Why Is the QROPS HMRC List Important?

Transferring your UK-registered pension to a scheme not listed as a QROPS can result in tax charges.

Unless specific exemption conditions are met, such transfers are typically treated as unauthorised payments, attracting a 40% tax charge – potentially rising to 55% in some cases. The scheme administrator may also be liable for a scheme sanction charge.

To avoid this, the receiving scheme must be listed on the HMRC QROPS list at the time of transfer. Moreover, under legislation effective from 30 October 2024, a 25% Overseas Transfer Charge (OTC) will apply unless the QROPS is located in the same country where you are tax resident at the point of transfer. This rule replaces the previous exemption for transfers to schemes within the EEA or Gibraltar.

UK expats should therefore ensure:

• The scheme is included on the QROPS list,
• They are resident in the same jurisdiction as the QROPS at the time of transfer, and
• They remain compliant for five full UK tax years post-transfer, or risk retroactive charges.

What Are the QROPS Pension List Eligibility Requirements?

Before a pension scheme can appear on the HMRC QROPS list, it must first qualify as a Recognised Overseas Pension Scheme (ROPS). To achieve and maintain QROPS status, the scheme must satisfy both structural and jurisdictional requirements, and its administrator must:

• Notify HMRC that the scheme qualifies as a ROPS.
• Formally request inclusion on HMRC’s public QROPS list.
• Undertake to provide HMRC with any required information to demonstrate continued compliance.
• Notify HMRC via form APSS251B if the scheme ceases to meet the ROPS conditions.

A pension scheme cannot be both a UK-registered pension scheme and a ROPS. Additionally, it must be established in one of the following jurisdictions:

• Outside the United Kingdom.
• An EU member state, Iceland, Norway, or Liechtenstein.
• A country (excluding New Zealand) that has both a double taxation agreement with the UK and a non-discrimination clause.
• A country with a tax information exchange agreement with the UK.

To qualify as a ROPS, the scheme must also satisfy the following three tests:

1. The tax recognition test.
2. The regulatory requirements test.
3. The pension age and benefits tax relief tests.

The Tax Recognition Test

To pass the tax recognition test, the scheme must be registered with the tax authority in its home jurisdiction and available to local residents. The country must operate a system of personal income taxation and offer tax relief either on contributions or on distributions.

The only exceptions are schemes on the Australian QROPS list, which must comply with superannuation plans.

Regulatory Requirements Test

The scheme must be regulated by a pension authority in its jurisdiction. If no such regulator exists, it may still qualify if it meets one of the following conditions:

1. It is established in an EU country, Iceland, Norway, or Liechtenstein.
2. It is an occupational pension scheme offered by an employer.
3. It is administered by an entity authorised to manage pension schemes.
4. It is administered by an entity authorised to provide pension schemes.

The Pension Age and Benefits Tax Relief Test

To be a ROPS, a pension scheme must only allow withdrawals from the age of 55, except in cases of early retirement due to ill health. Early access for certain professions (e.g. athletes) is permitted only if this is explicitly stated in the scheme rules and consistent with UK legislation.

Where tax relief is available on contributions, it must not be offered exclusively to non-residents of the country where the scheme is based.

Why Do Pension Plans Get Removed From the HMRC List of QROPS?

A pension scheme may be removed from the HMRC QROPS list for several reasons. However, due to confidentiality obligations under UK tax law, HMRC does not publicly disclose the specific rationale for each delisting.

Below are common reasons why schemes are excluded, along with their implications:

To mitigate these risks, speak to a qualified cross-border pension specialist. At Titan Wealth International, our advisers conduct a full technical review of your existing QROPS, including fee structures and investment suitability. Where appropriate, we recommend alternative schemes that better align with your residency, retirement objectives, and the latest HMRC criteria.

What Are the Benefits of Choosing a Scheme From the QROPS Approved List?

Maintaining your pension within a scheme listed on HMRC’s QROPS register can offer significant tax advantages, provided you meet the relevant conditions at the time of transfer.

These benefits can help UK expats preserve and enhance their retirement wealth. Key benefits include:

1. Inheritance tax exemption.
2. Overseas transfer allowance.
3. Pension commencement lump sum.
4. Double taxation agreement.

Inheritance Tax Exemption

Under current rules, pension funds held in a QROPS are typically not considered part of your UK estate for inheritance tax purposes. This allows you to pass on pension assets to beneficiaries after your death without incurring UK IHT.

However, HMRC has confirmed that from 6 April 2027, unused pension funds – including those held in QROPS – will become subject to UK IHT.

While local inheritance rules may still apply depending on the jurisdiction, countries such as Malta currently offer more favourable estate planning frameworks.

Given the upcoming legislative changes, individuals considering QROPS for IHT mitigation should seek professional advice to reassess their long-term strategy.

Overseas Transfer Allowance

The Overseas Transfer Allowance (OTA), along with the Lump Sum Allowance (LSA) and the Lump Sum and Death Benefit Allowance (LSDBA), replaced the Lifetime Allowance from 6 April 2024. These allowances cap the amount you can transfer or withdraw from a UK pension scheme, including QROPS, without triggering UK tax charges.

• OTA: Set at £1,073,100, the OTA determines how much you can transfer to a QROPS without incurring the 25% Overseas Transfer Charge (OTC) – provided the receiving scheme is based in your country of tax residence. Transfers above this threshold are subject to a 25% charge on the excess.
• LSA: Capped at £268,275 (25% of the OTA), the LSA is the amount you can withdraw as a pension commencement lump sum free of UK tax.
• LSDBA: Also set at £1,073,100, the LSDBA defines the amount that can be paid out tax-free to beneficiaries on death. Any excess is taxed at the beneficiary’s marginal rate.

Pension Commencement Lump Sum

The Pension Commencement Lump Sum (PCLS) refers to the portion of your pension fund that can be withdrawn tax-free, typically from age 55.

If your pension is held within a Qualifying Recognised Overseas Pension Scheme (QROPS) listed by HMRC, you may be eligible to withdraw a tax-free lump sum of up to 25% of your fund – subject to the Lump Sum Allowance (LSA) limit of £268,275.

Some jurisdictions may permit up to 30% to be withdrawn tax-free; however, the UK tax benefit only applies to 25% of the first £1,073,100, in line with the new allowances introduced following the abolition of the Lifetime Allowance.

Any amount above the LSA threshold is taxed at your marginal UK income tax rate, unless exempt under local rules or a relevant Double Taxation Agreement (DTA).

It is essential to review both UK and local tax implications before making any withdrawals.

Double Taxation Agreement

UK non-tax residents are generally not subject to UK tax on QROPS withdrawals. Conversely, UK tax residents are typically liable for UK income tax on pension income including withdrawals from a QROPS.

This can result in the risk of double taxation if the pension is also taxed in the jurisdiction where the QROPS is held.

However, if the UK has a double taxation agreement (DTA) with your QROPS country, you can avoid being taxed twice on the same income. Under a DTA, the tax you pay on your pension in your QROPS country is offset against taxes owed in the UK.

The UK has DTAs with many jurisdictions that host approved QROPS, including:

• Malta
• Gibraltar
• Spain
• Portugal

Before transferring or drawing funds, it is advisable to consult a financial adviser with cross-border expertise to interpret the relevant DTA and its application to your specific tax residency.

QROPS may also offer other planning advantages, such as access to broader investment options (e.g. ETFs, bonds), currency flexibility, and potential mitigation of exchange rate risks depending on the scheme’s jurisdiction and structure.