If you’re a UK expat planning to retire in France, transferring your pension to France might help you reduce or eliminate tax liability on your pension income in the UK. Moving your pension pot also protects your funds from changes in UK tax laws and allows you to manage your savings more effectively.
In this detailed guide, we’ll explain whether you can transfer your UK pension to a QROPS in France. We’ll also provide the benefits and tax implications of transferring your pension to France and offer alternative overseas pension options.
What You Will Learn
- Can you make a pension transfer to a QROPS in France?
- How do you transfer your pension to France while using QROPS?
- What are the benefits and tax implications of contributing to an EU-based QROPS while residing in France?
- What are the alternative options for transferring your UK pension to France?
Can You Transfer a UK Pension to a QROPS in France?
No, you can’t transfer your UK pension to a QROPS in France because France isn’t on HMRC’s list of qualified recognised overseas pension schemes (QROPS).
Previously, some French pensions were listed as QROPS, but in 2016, HMRC removed all French PERPS (Plan d’Épargne Retraite Populaire) from the official QROPS list because they did not meet the required UK pension rules.
For example, the HMRC age requirement for accessing your pension is 55, while in France, it’s 62. Unlike HMRC-approved pensions, French schemes also allow for early withdrawals in case of:
- Illness
- The end of unemployment benefits
- Excessive debt
- Death of your spouse
The French view QROPS as a pot of money in a trust rather than a pension scheme.
Another reason France isn’t on the HMRC list is that QROPS breaks the rules of PER (Plan d’Epargne Retraite), the French “equivalent” of QROPS. PER and QROPS aren’t the same, but they’re both long-term savings products that offer tax benefits and flexible investment options. French residents often use PER instead of QROPS.
How Can You Transfer Your UK Pension to France?
While you can transfer your pension to another type of French pension scheme, you’ll likely have to pay a minimum 40% tax on it. Transferring a UK pension to a scheme not recognised by HMRC is considered an unauthorised payment.
In the past, this issue could easily be solved by choosing an EU-based QROPS and having the money paid into a French bank account. In such a case, you’d avoid the 25% overseas transfer charge (OTC) since the old rules allowed expats to move a UK pension to a European Economic Area (EEA) as long as they lived in the UK or an EEA country.
However, from 30 October 2024, OTC exemptions are being removed for EEA QROPS transfers. This means you will only avoid the 25% OTC if your QROPS is based in the country where you live—which is not possible in France.
Speaking to a financial adviser can help you choose an alternative solution to reduce tax liability. Financial experts at Titan Wealth International can suggest a transfer to another scheme based on your circumstances.
Why You Should Consider a Self-Invested Personal Pension (SIPP)
Instead of a QROPS, consider transferring your pension to an international self-invested personal pension (SIPP). A SIPP lets you transfer funds from UK-based pension schemes abroad and protects you under UK regulations.
Some of the main differences between a SIPP and QROPS include:
| SIPP | QROPS |
|---|---|
| Typically based in your country of residence | Located in an offshore jurisdiction with lower taxes than the UK |
| Subject to the same taxation rules as other pensions in the UK | May offer more favourable tax treatment depending on the QROPS jurisdiction |
| Offers a wider range of investment options like stocks, bonds, and funds | May have a more limited offer of investment options |
| Can be more difficult to transfer due to the UK’s strict rules and regulations | Can have more flexible transfer options, allowing you to transfer funds to another QROPS or back to the UK |
| Usually regulated by the Financial Conduct Authority (FCA) in the UK | Regulated by the financial regulatory authorities at QROPS source, potentially offering weaker protection |
| Typically includes lower fees and has no hidden costs | Usually has higher initial and ongoing costs and can include hidden costs |
What Are the Benefits of Moving a UK Pension to an International SIPP?
Besides the numerous investment options you can access through an international SIPP, the main advantages of transferring your UK pension to a SIPP are:
| Advantage | Details |
|---|---|
| Withdrawal Flexibility | International SIPPs allow you to manage your pension from anywhere and offer a flexi-access drawdown. This means you can withdraw 25% of your pension pot tax-free when you turn 55 (57 from 2028) and receive the rest as income or keep it invested. |
| Tax Efficiency | A double taxation agreement (DTA) is an agreement that determines the amount of tax you owe to each country as an expat. Since the UK has a DTA with France, you may be exempt from being taxed twice on your pension income. |
| Currency Management | International SIPPs allow you to hold your pension in all major currencies. This means you can convert your GBP pension funds into EUR to avoid currency fluctuation risks when withdrawing your pension. |
| Estate Planning | Previously, SIPPs were IHT-free, but from April 2027, the UK government is introducing new IHT rules that may tax unused pension funds on death. If you die before 75, your beneficiaries currently inherit the pension tax-free (if allocated within two years). However, under the new 2027 rules, personal pensions may be included in the value of your estate for UK inheritance tax purposes. Final details are yet to be confirmed, so expats must review their estate planning strategies carefully. |
Before choosing a SIPP, seek assistance from a professional adviser to ensure this is the right choice for your future.
Alternative Options for Transferring a UK Pension to France
If you decide against transferring your UK pension to a QROPS while living in France but don’t want to leave your pension in the UK, you can:
- Think about cashing in your pension
- Consider the assurance-vie option
Think About Cashing in Your Pension
You can cash in your pension as an uncrystallised funds pension lump sum (UFPLS), which means withdrawing funds directly from your pension pot. You can do so as soon as you reach the minimum pension access age of 55 if you haven’t accessed your pension in other ways, like taking a 25% tax-free lump sum.
If your withdrawal complies with French laws, the lump sum will be taxed at a fixed rate of 7.5% minus the 10% deduction, meaning the tax rate is actually 6.75%. This is more beneficial than potentially paying 40% tax for transferring your pension to a French pension scheme.
Consider the Assurance-Vie Option
For UK expatriates residing in France, Assurance-Vie represents a highly tax-efficient investment vehicle that offers wealth preservation, estate planning advantages, and succession tax benefits when you die. It is particularly well-suited for those intending to retire or reside in France on a long-term basis.
Funds held within an Assurance-Vie benefit from tax deferral, meaning they are not subject to annual French income tax or capital gains tax while invested. Additionally, there is no cap on contributions, allowing for flexible long-term wealth accumulation.
Assurance-Vie policies benefit from preferential tax treatment when held for more than eight years, offering reduced tax rates on withdrawals and an annual tax-free allowance.
Taxation of Withdrawals
- Withdrawals Before Eight Years:
- Any gains withdrawn within the first eight years are subject to a flat tax rate of 30% (12.8% income tax + 17.2% social charges).
- Withdrawals After Eight Years:
- If total premiums paid exceed €150,000, the applicable income tax rate on gains reduces to 7.5% (instead of 12.8%) plus 17.2% social charges.
- Gains are also eligible for an annual tax-free allowance of:
- €4,600 for individuals.
- €9,200 for married couples.
Book Your Complimentary Pension Review
Planning to retire in France? Ensure your pension strategy is optimised for your future. Speak to an expert to review your options.
- Assess your existing pension structure
- Understand French tax implications and QROPS considerations
- Explore the best strategies for maximising your retirement income
Optimise Your Pension with a QROPS Review
If you live in France and have a QROPS outside of France, or you’re planning to move to France and want to understand your pension options, recent rule changes may affect your financial planning.
At Titan Wealth International, our expat pension specialists will assess your pension structure, tax exposure, and retirement strategy. We help you determine if your existing QROPS remains suitable or if alternative solutions, such as an International SIPP, offer a more tax-efficient approach.
What’s Included in Your Complimentary Review?
- QROPS Suitability Assessment – Review your current QROPS and whether it still aligns with your retirement goals.
- Tax Impact Analysis – Understand the Overseas Transfer Charge (OTC) and potential tax liabilities.
- Alternative Pension Strategies – Explore International SIPPs and other tax-efficient retirement options.
With new regulations in place, making an informed decision is crucial to avoid unnecessary tax penalties.
Key Takeaway
While transferring a UK pension directly to a QROPS in France is not possible, there are alternative tax-efficient pension solutions available for expats residing in France.
This guide has outlined why France is no longer on HMRC’s QROPS list, the impact of recent rule changes on EEA QROPS transfers, and the most suitable alternatives for managing your UK pension while living in France.
We have explored Self-Invested Personal Pensions (SIPPs), Assurance-Vie, and pension lump sum withdrawals, detailing their benefits, tax implications, and suitability based on individual financial circumstances.
Given the complexities of cross-border pension planning and taxation, seeking specialist financial advice is essential to ensure the most efficient and compliant strategy.
At Titan Wealth International, our experts provide comprehensive pension analysis and personalised strategies to help you optimise your pension structure, potentially minimise tax liability, and maximise long-term financial security.
