QROPS (Qualifying Recognised Overseas Pension Scheme) is a type of personal pension scheme that meets HMRC requirements, allowing UK pension holders to transfer their pensions, such as Final Salary or Defined Contribution schemes, to a qualifying overseas jurisdiction.
While originally designed to support the free movement of capital within approved regions, QROPS also offers various benefits compared to traditional UK workplace pensions. These include potential tax efficiencies, broader investment options, and flexibility in retirement planning.
Since Brexit, many UK residents have asked: What happens to QROPS after Brexit? Has anything changed? Is it still a viable option?
In this article, we break down everything you need to know about QROPS for UK residents post-Brexit. We will explore the changes brought about by the UK’s departure from the EU, and explain why now may be the right time to seek advice on transferring your pension.
Before we dive in, our CEO and Independent Financial Adviser, Dominic James Murray, shares his expert insights in the video below:
🎥 Check out our YouTube channel for more expert guidance on UK Pension Transfers
Can a UK Resident Have a QROPS?
UK resident living outside the UK or retiring abroad can have a QROPS that satisfy the HMRC's qualification. If a UK resident is advised by FCA-regulated IFA to transfer to QROPS, they have to apply to the HMRC before they can transfer their UK pension scheme to QROPS. The list of QROPS HMRC are updated from time to time.
You should check whether the country you are planning to reside in is included in the HMRC QROPS list. You can ask your IFA about this.
QROPS for UK Residents Post-Brexit
Transferring your Final Salary or workplace pension to a QROPS can offer significant benefits: tax efficiency, access to a wider range of investment options and funds, and the ability to avoid the Lifetime Allowance (LTA) charge.
However, before Brexit, UK residents couldn’t take full advantage of QROPS. The UK government hadn’t introduced clear regulations allowing UK-based individuals to transfer their pensions to a QROPS, even if the scheme met HMRC’s criteria.
That changed with Brexit. As the UK withdrew from the European Union, questions around QROPS resurfaced. Would Brexit complicate things further, or simplify the process?
Surprisingly, Brexit made things simpler for UK residents.
Before 1 January 2021, the law stated that no Overseas Transfer Charge (OTC) applied if both the pension holder and the QROPS were based in the European Economic Area (EEA). The UK remained part of the EEA until the end of 2020.
From 1 January 2021, new regulations kicked in. The OTC no longer applies if the pension holder lives in the UK or an EEA country and the QROPS is also set up in an EEA country, such as Gibraltar.
Thanks to this regulatory shift, UK residents can now legally and effectively transfer their pensions to a QROPS. Something that wasn’t possible under previous EU-based restrictions.
Confused about the Overseas Transfer Charge? Click here to learn more.
How Long Will QROPS Be Available for the UK Residents?
QROPS is now a viable option for UK residents. But how long will it stay that way? There’s no fixed answer. The UK government can change pension transfer rules at any time.
If you’re considering a QROPS to reduce tax or gain more flexibility, act quickly. Delaying could mean missing out.
Speak with an FCA-regulated Independent Financial Adviser (IFA) before any rules change. Your adviser can explain your options and help you decide what to do with your Final Salary Pension.
QROPS for UK Residents: Get the Best Financial Advice From Cameron James’ IFA
With more than a decade of experience in the UK pension transfer industry, Cameron James has helped thousands of clients navigate complex pension rules, including QROPS for UK residents post-Brexit.
Our FCA-regulated Independent Financial Advisers will provide you with clear, personalised advice on transferring your UK pension to QROPS, ensuring full compliance with HMRC rules while helping you make the most of your pension benefits.
Don't wait for the next rule change to disrupt your plans. Book your free, no-obligation consultation today and find out if QROPS is right for your situation.