What is a Qualifying Recognised Overseas Pension Scheme?

A Qualifying Recognised Overseas Pension Scheme (QROPS) is a pension scheme, outside of the UK, that has been registered by the UK’s Her Majesty’s Revenue and Customs (HMRC) to receive transfers in from UK pension schemes.

QROPS came into effect with the introduction of Pensions Simplification in the UK, on A-day, which was 6th April 2006. The purpose of the new legislation was, in order to transfer a UK pension overseas, to remove the responsibility from the migrating individual, to make specific declarations and provide certain documents and place the responsibility on the receiving overseas scheme to register with the HMRC as a Qualifying Recognised Overseas Pension Scheme. Without that registration with HMRC an overseas pension scheme would not be permitted to accept a transfer in from a UK pension scheme, however, the responsibilities of the QROPS does not end with registering.

The overseas pension has reporting responsibilities, to HMRC, for a full 5 UK tax years of the pension member’s overseas residency. This reporting is in place to ensure that payments made to an overseas pension member, who’s funds had transferred over from a UK scheme, were receiving benefits broadly in line with what the UK scheme could pay.