The overseas transfer charge is 25% of the transferred value, and an EEA QROPS no longer escapes it
A transfer from a UK registered pension scheme to a qualifying recognised overseas pension scheme attracts an overseas transfer charge of 25% of the transferred value. Section 244AC of the Finance Act 2004 imposes it, and it falls away only where one of the exclusion conditions in sections 244B to 244F applies. HMRC’s Pensions Tax Manual, updated on 24 August 2026, states the rate in those terms and makes the member and the scheme administrator jointly and severally liable.
The rule that changed is section 244C. Until 30 October 2024, a transfer where both the member and the QROPS sat in the UK, the European Economic Area or Gibraltar was excluded. The government removed that exclusion with immediate effect on 30 October 2024, to align EEA and Gibraltar transfers with the rest of the world. A Malta or Gibraltar QROPS now gives a UK resident member no protection on that ground.
Which two rules can trigger the overseas transfer charge
There are two routes to the same 25%, and a transfer can pass one and fail the other.
| Trigger | Legislation | What is charged |
|---|---|---|
| No exclusion condition is met | Section 244AC | 25% of the transferred value |
| Transferred value exceeds the available overseas transfer allowance | Section 244IA | 25% of the excess, even where an exclusion applies |
| An exclusion stops being met inside the relevant period | Section 244AC | 25% of the transferred value |
Source: HMRC Pensions Tax Manual PTM102200 and PTM102400, 24 August 2026.
Which exclusion conditions still remove the charge in 2026
Five conditions sit in the legislation. Four still work. One is closed to new transfers.
| Exclusion condition | Section | What it requires | Position in 2026 |
|---|---|---|---|
| Member resident in the same country as the QROPS | 244B | Tax residence where the receiving QROPS is established | In force |
| Member and QROPS both in the UK, EEA or Gibraltar | 244C | Both sides inside that area | Closed. Requested before 30 October 2024 and completed before 30 April 2025 only |
| QROPS is an occupational pension scheme | 244D | Member employed by a sponsoring employer at the transfer date | In force |
| QROPS set up by an international organisation | 244E | Scheme established for that organisation’s employees | In force |
| QROPS is an overseas public service scheme | 244F | Member is an employee of a participating employer | In force |
Source: HMRC Pensions Tax Manual PTM102300, 24 August 2026.
For most retirees, section 244B is the only one in play. It asks where the member is resident at the time of the transfer, not where the member intends to end up. A retiree tax resident in Mauritius transferring to a Mauritian QROPS meets it. The same retiree transferring to a Maltese QROPS does not, and pays 25%. Residence decides much else besides, covered under state pension and residency.
How much can be transferred before the overseas transfer allowance bites
The second trigger has nothing to do with where anyone lives. From 6 April 2024, when the lifetime allowance was abolished, a member’s overseas transfer allowance was set equal to their lump sum and death benefit allowance, standard figure £1,073,100, reduced but not below nil by the transferred value of any earlier recognised transfer to a QROPS. Anything above the available allowance is charged at 25% under section 244IA even where an exclusion condition is satisfied.
That is the trap for larger pots. A member correctly resident in the QROPS country, with a clean section 244B exclusion, still pays 25% on every pound above the allowance. Check the transfer value and any protections first, alongside the wider position on private pensions, QROPS and tax.
| Date | Change |
|---|---|
| 9 March 2017 | Overseas transfer charge introduced |
| 6 April 2024 | Lifetime allowance abolished, overseas transfer allowance set at £1,073,100 |
| 30 October 2024 | Section 244C exclusion for the EEA and Gibraltar removed with immediate effect |
| 6 April 2025 | EEA overseas pension schemes and ROPS must meet the same conditions as the rest |
| 30 April 2025 | Last completion date for a transfer requested under section 244C |
| 6 April 2026 | Every UK registered pension scheme must have a UK resident scheme administrator |
Sources: HMRC policy paper, 30 October 2024, and PTM102300, 24 August 2026.
What happens if circumstances change within five full tax years of the transfer
An exclusion is not settled on the day the money moves. It must hold for the relevant period, which runs from the transfer to the end of five full tax years afterwards. PTM102400, updated on 24 August 2026, works the arithmetic through: a transfer made on 11 August 2017 carries a relevant period ending 5 April 2023.
If the member stops meeting the condition inside that window, the charge arises at that moment under section 244AC. The recurring pattern: a member transfers to a QROPS in the country they live in, satisfies section 244B, then relocates two years later. The exclusion fails and 25% falls due on the original transferred value. The scheme manager must tell HMRC within 90 days of being told of the change, and payment is due 90 days after HMRC issues the accounting reference details. It runs both ways. GOV.UK guidance says the charge is refunded where the member moves to the QROPS country within five years.
Why the 25% headline is not the main risk for most transfers
Here is the counterweight. The charge is the number everyone quotes, and for a member tax resident in the QROPS country with a pot under the allowance it never applies. Two quieter problems do more damage.
The first is paperwork. HMRC guidance last updated on 29 July 2025 requires the scheme administrator to request the necessary information within 30 days and gives the member 60 days from the transfer request to supply it. Miss that and the administrator must deduct the charge where it applies. It can be reclaimed, but the money has gone meanwhile.
The second is the status of the receiving scheme. HMRC updates the recognised overseas pension schemes notification list on the 1st and 15th of each month, most recently on 1 September 2026, and says of it: “We cannot guarantee these are ROPS or that any transfers to them will be free of UK tax.” Inclusion is a declaration by the scheme, not an HMRC approval. Which country then taxes the income is a further question, answered by the relevant agreement in the GOV.UK tax treaties collection, and by how this site reads them, set out on the about page.
Frequently asked questions
Does a transfer to a QROPS in Malta or Gibraltar still avoid the 25% charge? Not unless the member is tax resident there, or an exclusion in sections 244D to 244F applies. Section 244C was removed on 30 October 2024.
Is the overseas transfer allowance separate from the lump sum allowance? Yes. It is set at the level of the lump sum and death benefit allowance, £1,073,100 as standard, reduced by earlier transfers to a QROPS. The excess is charged at 25% under section 244IA.
If the charge is taken and the member later moves to the QROPS country, is it refunded? Yes, where the move happens within five years of the transfer, according to GOV.UK guidance.
Does the HMRC ROPS list mean a scheme is safe to transfer to? No. It records schemes that have told HMRC they meet the conditions. HMRC cannot guarantee they are ROPS or that transfers will be free of UK tax.
Sources
- HMRC Pensions Tax Manual PTM102200, 24 August 2026
- HMRC Pensions Tax Manual PTM102300, 24 August 2026
- HMRC Pensions Tax Manual PTM102400, 24 August 2026
- HMRC, Reducing tax-free overseas transfers of tax relieved UK pensions, 30 October 2024
- HMRC, Overseas pensions: pension transfers, 29 July 2025
- HMRC, Check the recognised overseas pension schemes notification list, 1 September 2026
- GOV.UK, Transferring to an overseas pension scheme
- HMRC, Tax treaties collection, published 28 July 2014
This is general information about how the rules work, not financial advice.…
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