QROPS in Switzerland: What UK Expats Living in Switzerland Need to Know

However, UK pension transfer rules mean Swiss QROPS are now generally only practical for individuals who are tax resident in Switzerland when the transfer takes place.

On 30 October 2024, the UK removed the Overseas Transfer Charge (OTC) exemption that had previously applied to transfers to many QROPS established in the EEA and Gibraltar. Switzerland was unaffected because transfers to Swiss QROPS have been subject to the standard OTC rules since the charge was introduced in 2017.

If you are a tax resident in Switzerland when you transfer your UK pension to a Swiss QROPS, the transfer will normally be exempt from the 25% OTC under the same-country residence exemption. If you are not a tax resident in Switzerland at the time of transfer, a 25% Overseas Transfer Charge will usually apply unless another exemption is available.

This guide explains why Swiss QROPS were historically popular, who can still benefit from them, the eligibility criteria, and how the current rules affect UK pension transfers to Switzerland. We also explore alternative pension solutions that may be more suitable depending on your residency status.

Is QROPS in Switzerland Still a Viable Option for UK Expats?

Switzerland was historically a popular destination for UK expats transferring their pensions to a QROPS due to its stable financial system, tax efficiency, and flexible pension management. It allowed retirees to hold and withdraw their pension in Swiss francs, which may reduce exchange rate risk and currency conversion costs where retirement spending is also in Swiss francs.

Additionally, transferring a UK pension to a Swiss QROPS could previously provide inheritance tax (IHT) advantages for some individuals, depending on their UK tax position.

That position has now changed. The Finance Act 2026, which received Royal Assent on 18 March 2026, confirmed that for deaths on or after 6 April 2027, most unused pension funds and death benefits, including those held within QROPS, will be brought within the deceased’s estate for UK IHT purposes.

The April 2027 IHT change forms part of a broader reset of how UK tax interacts with overseas residents.

From 6 April 2025, the UK IHT transitioned to a residence-based system. Under the new rules, individuals who have been UK residents in ten or more of the previous 20 UK tax years (the 10-out-of-20 test) are classified as long-term residents (LTRs) and become subject to UK IHT on their worldwide estate, generally at a rate of 40% on value exceeding the available nil-rate bands.

Combined with the April 2027 inclusion of pensions in the UK IHT estate, these reforms create two outcomes for Swiss QROPS holders:

• A Swiss QROPS held by a UK long-term resident will be within UK IHT at death.
• A Swiss QROPS held by an individual who has remained a non-UK resident long enough to fall outside the 10-out-of-20 test will generally remain outside the scope of UK IHT.

At the same time, the UK abolished the historic non-domicile (non-dom) regime and replaced it with a four-year Foreign Income and Gains (FIG) regime. Individuals who become UK tax residents after having been non-UK residents for at least ten consecutive tax years may qualify for the four-year FIG regime, subject to meeting the relevant conditions. After the four-year period, worldwide income and gains generally become taxable in the UK on an arising basis.

Consequently, a Swiss QROPS can still offer potential benefits for individuals who have established long-term residence in Switzerland and do not intend to return to the UK. For such individuals, the April 2027 pension IHT reforms may have little practical impact, as their Swiss QROPS is likely to remain outside the UK inheritance tax net.

However, if you are contemplating returning to the UK, even part-time or seasonally, modelling your residence days against the 10-out-of-20 test and the four-year FIG window is now a central part of QROPS planning.

It is also important to note that personal representatives, not pension scheme trustees, are responsible for reporting and paying any UK IHT due. Spouses, civil partners, and registered charity exemptions continue to apply.

What Are the Tax Implications of Transferring a UK Pension to a QROPS in Switzerland?

If you decide to transfer your pension from the UK to a QROPS in Switzerland, you may be liable for the overseas transfer charge. Switzerland is not a member of the European Economic Area (EEA), so the 30 October 2024 removal of the EEA/Gibraltar exemption from the OTC did not change the position for Swiss QROPS. The OTC has applied to non-resident transfers to Switzerland since the charge was first introduced on 9 March 2017.

The 25% Overseas Transfer Charge generally applies to transfers to Swiss QROPS unless one of the statutory exemptions applies:

• You are a Swiss tax resident at the time of transfer (the same-country residence rule).
• The Swiss QROPS is an occupational pension scheme provided by your employer (relevant for the CERN Pension Fund and for some corporate Swiss arrangements).
• The QROPS is set up by an international organisation to provide benefits for its past or present employees (also relevant for CERN).

Where the transfer exceeds the Overseas Transfer Allowance (currently £1,073,100), a 25% charge generally applies to the excess, even where one of the exemptions above would otherwise apply.

If your residency changes during the five-year ring-fence period from transfer (for instance, you move out of Switzerland), HMRC may assess the Overseas Transfer Charge if a change in circumstances causes an exemption to cease to apply within the relevant five-year period. Conversely, if you become a Swiss resident within five years of an originally charged transfer, you may be entitled to a refund. To notify HMRC of relevant changes, use the form APSS241.

To ensure full compliance and efficient tax planning for a Swiss pension transfer, it is advisable to consult a specialist adviser who can assess your circumstances and explore alternative retirement solutions where applicable.

How Are Your QROPS Withdrawals Taxed in Switzerland?

Subject to the rules of the receiving scheme and applicable legislation, QROPS holders can normally begin to access benefits from age 55, but withdrawals are taxed under Swiss rules rather than being tax-free under the UK Lump Sum Allowance (LSA). Lump sums are usually taxed at preferential (but not zero) rates that vary by canton. For retirees who remain in Switzerland, withdrawals are subject to Swiss lump-sum taxation, which consists of:

• Federal tax: Lump-sum withdrawals are taxed on a separate reduced scale, not at the standard federal income tax rates (maximum 11.5% applies only to ordinary income).
• Cantonal and communal tax rates: These vary significantly depending on the canton of residence. When combined with federal tax, the effective lump-sum rates remain preferential but still vary widely by canton.

Switzerland’s tax system operates on a progressive basis, similar to the UK’s marginal income tax structure, where tax rates increase with income levels, although lump sums are calculated on special progressive scales rather than ordinary income brackets.

Tax Planning Considerations for Swiss QROPS Holders

For Swiss QROPS holders, canton selection can significantly impact the overall tax efficiency of pension withdrawals. As both income tax rates and pension lump-sum taxation vary considerably between cantons, choosing the right place of residence is an important component of retirement planning.

For one-off lump-sum pension withdrawals, Schwyz is often regarded as one of the most favourable cantons for typical pension amounts, with effective rates ranging from 2% to 5% on lump-sum withdrawals of up to CHF 500,000.

At substantially higher withdrawal amounts (CHF 1 million+), Appenzell Innerrhoden may offer a more favourable tax outcome for larger withdrawals, depending on the amount withdrawn and the applicable cantonal tax rules.

While Zug remains a highly attractive low-tax jurisdiction, it is not always the most favourable canton for lump-sum pension taxation. However, if you intend to draw pension benefits as regular income rather than as a single capital payment, Zug, Schwyz, and Nidwalden are generally considered among the most tax-efficient cantons due to their comparatively low ongoing income tax rates.

Because pension taxation is determined by the canton in which you are resident, the choice of domicile directly influences the tax treatment of retirement benefits. The optimal canton will therefore depend on your intended withdrawal strategy, whether that involves a lump-sum distribution, regular pension income, or a combination of both.

Which QROPS Plans Does Switzerland Offer?

The Swiss pension system operates under a three-pillar structure:

• State Pension: Funded by the Swiss government and based on contributions.
• Occupational Pension: A mandatory scheme funded by both employers and employees.
• Private Pension: Voluntary, individual pension savings to supplement retirement income.

For UK expats seeking to transfer their UK pension to a QROPS in Switzerland, there are currently two Swiss pension schemes included on HMRC’s published QROPS list:

These are the only Swiss pension schemes currently listed on the official HMRC QROPS list. This is due to the stringent framework set by HMRC, which outlines the qualifying criteria for a pension scheme to obtain QROPS status. The list changes twice monthly, so always check the latest list before proceeding.

One of the key requirements is that recognised overseas pension schemes must broadly satisfy HMRC’s conditions regarding minimum pension age and benefit access.

How Does Independent Vested Benefits Foundation QROPS Work?

The Independent Vested Benefits Foundation accepts eligible UK pension transfers into a Swiss vested benefits arrangement, subject to the scheme’s eligibility criteria and UK pension transfer rules. Transfers may be conducted exempt from the UK’s 25% Overseas Transfer Charge only if the individual is tax resident in Switzerland at the time of transfer and the scheme is HMRC-recognised. Swiss tax will still apply to future withdrawals, subject to HMRC and Swiss regulatory requirements.

To qualify for this QROPS in Switzerland, you must:

• Meet the receiving scheme’s eligibility requirements.
• Be resident outside the UK.
• Be tax resident in Switzerland at the time of transfer (this is required to avoid the 25% Overseas Transfer Charge).
• Have pension assets of at least CHF 100,000.(Confirm the current minimum transfer amount with the provider before proceeding, as scheme requirements may change.)

Two related but distinct timeframes apply to QROPS transfers and need to be understood separately. First, the QROPS scheme administrator must report payments and certain events to HMRC for ten years from the date of transfer. This is a scheme obligation, not a member tax exposure.

Second, payments out of the funds you transferred remain subject to UK pension tax rules for five UK tax years from the date of transfer, regardless of where you live. If you become a UK tax resident again or receive payments during those five tax years, UK rules will determine the tax outcome for the relevant transferred funds. After five full UK tax years of non-UK residence following transfer, payments are no longer caught by UK pension rules, subject to the application of the UK-Switzerland Double Taxation Agreement.

Alongside these tax considerations, the plan offers disability and death benefit insurance, subject to underwriting, policy terms and exclusions. These are not guaranteed entitlements. There is a 24-month waiting period for a disability pension, and policyholders can opt for disability pensions or lump-sum death benefits, either separately or in combination.

In addition to insurance coverage, the Independent Vested Benefits Foundation may offer several tax advantages, depending on your circumstances, including:

• No Swiss wealth or income tax on vested benefits while invested, subject to Swiss tax rules.
• Preferential but taxable lump-sum withdrawal rates, which vary by canton.
• Withholding tax may apply if you leave Switzerland permanently, but it can sometimes be reduced or reclaimed under double-tax treaties, subject to conditions.
• Lower one-off taxation on retirement capital withdrawals.
• Funds are denominated in Swiss francs, which may reduce FX risk for residents whose retirement spending is in CHF, but create FX risk where liabilities or spending are in GBP, EUR or another currency.

Transferring a UK pension to the Independent Vested Benefits Foundation incurs a one-time advisory and processing fee, typically charged as a percentage of the transferred amount. The current figure should be confirmed directly with the foundation before transfer.

How Does the CERN Pension Fund Work?

The CERN Pension Fund is an occupational pension scheme designed exclusively for eligible employees of the European Organisation for Nuclear Research (CERN). This fund provides retirement, disability and death benefits for eligible members and their beneficiaries.

The CERN Pension Fund is a restricted occupational pension scheme, available exclusively to CERN employees and not open to the general public. Non-members seeking a QROPS transfer must consider alternative options, such as the Independent Vested Benefits Foundation, as the CERN Pension Fund does not accept external transfers.

Eligible CERN employees have the option to purchase additional pension service years to enhance their benefits. This can be achieved by:

1. Transferring a UK pension into the CERN fund at any time during employment; or
2. Buying additional membership years with personal funds, provided they have completed at least five years of CERN service.

Additionally, individuals who previously contributed to an employer-funded private pension scheme may request approval from the CERN Pension Fund to transfer their pension, subject to eligibility requirements.

The cost of transferring a pension into the CERN Pension Fund is determined by two primary factors: the individual’s reference salary at the time of transfer and their age, which influences the cost of purchasing additional service years.

Navigating QROPS transfers requires careful planning to ensure compliance with regulations and alignment with your long-term retirement objectives.

How To Transfer a UK Pension to a QROPS in Switzerland

If you’re not a CERN employee and want to transfer your UK pension to the Independent Vested Benefits Foundation in Switzerland, the steps are:

• Speak to a pension transfer specialist: They can help you confirm whether you’re eligible to transfer and whether a Swiss QROPS is appropriate for your circumstances.
• Consult your current pension provider: Speak to your UK pension provider to check whether the transfer is possible. If so, you’ll need to complete and submit the required transfer-out forms to begin the process.
• Contact the scheme provider: Contact the Independent Vested Benefits Foundation to confirm that it will accept your pension transfer.
• Complete Form APSS263: Complete the form and provide it to your UK pension provider as part of the transfer process. Failure to provide the required information within HMRC’s timescales may result in the Overseas Transfer Charge applying where the relevant conditions are met.

How To Transfer Your Pension to the CERN Pension Fund

The process is similar if you want to transfer your UK pension to the CERN Pension Fund. However, you will also need to:

1. Contact your current pension provider to confirm they permit transfers to the CERN Pension Fund.
2. Submit details of your current pension scheme to CERN’s Benefits Service so it can provide an illustration of your potential benefits following the transfer.
3. Request approval from the CERN Pension Fund if you wish to proceed.
4. Once the request is approved, the CERN Pension Fund will provide payment instructions and process the transfer in accordance with its procedures and timescales.

What Are the Benefits of Holding a QROPS in Switzerland?

Transferring a UK pension to a Swiss QROPS may provide financial and tax advantages for individuals who are Swiss tax residents, depending on their circumstances. Key benefits include:

• Potential Favourable Tax Treatment: Swiss QROPS holders may benefit from preferential tax rates on withdrawals, which vary by canton. From 6 April 2027, UK legislation brings most unused pension funds and death benefits, including those held within QROPS, into the deceased’s estate for UK inheritance tax purposes. The impact of these changes depends on your UK residence status and personal circumstances.
• Lump-Sum Withdrawals: Swiss QROPS holders may be able to take lump-sum benefits, which are taxed under Swiss rules and generally subject to preferential cantonal tax rates. The UK’s Pension Commencement Lump Sum rules do not apply to withdrawals from a Swiss QROPS.
• Currency Flexibility: Holding a pension in Swiss francs may reduce foreign exchange risk where your retirement spending is also in Swiss francs, but it may increase currency risk if your liabilities or spending are in another currency.

Optimise Your Pension with a QROPS Assessment

If you live in Switzerland and have a QROPS outside Switzerland, or you’re planning to move to Switzerland and want to understand your UK pension options, recent changes to UK pension and tax rules may affect your financial planning.

At Titan Wealth International, our QROPS specialists will assess your pension structure, tax exposure and retirement strategy. We help you determine whether your existing QROPS remains suitable or whether alternative solutions, such as an International SIPP, may be more appropriate for your circumstances.

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 and potential Swiss tax liabilities.
• Alternative Pension Strategies: Explore International SIPPs and other retirement planning options that may be appropriate for your circumstances.

With the recent changes to UK pension and tax rules, understanding how they apply to your circumstances can help you make an informed decision.