QROPS Pension Review for Expats: Why Old Offshore Pension Transfers May Need Reassessing

Technical note: This article reflects UK pension, QROPS and inheritance tax rules as of May 2026. QROPS, tax residency, inheritance tax and pension death benefit rules are complex and depend on the individual’s residence history, scheme jurisdiction, pension type, beneficiary position and future retirement plans. Personal tax and pension advice should be taken before making any decision to retain, restructure or transfer a QROPS.

Why are old QROPS pensions suddenly worth reviewing for expats?

Many British and UK-connected expats were advised years ago to transfer their pensions into QROPS in Malta, Gibraltar, the Isle of Man, or similar jurisdictions. In many cases, the rationale at the time centred on tax treatment, international flexibility, broader access to investment, estate planning, death benefit planning, and the idea that pension wealth could be moved out of the UK pension system.

That does not mean the original advice was necessarily wrong. It means the assumptions need to be retested.

A pension transfer that made sense under one tax regime may not remain optimal under another. The UK has moved from domicile and deemed-domicile rules to a long-term residence framework for inheritance tax, effective 6 April 2025. GOV. The UK confirms that from that date, if someone is a long-term UK resident, their overseas assets may be subject to inheritance tax if they make a transfer of assets or die. It also confirms that long-term residence can apply where someone has been a UK tax resident for the previous 10 consecutive years, or for 10 years or more within the previous 20 years.  

There is also a second major change. HMRC’s technical note states that from 6 April 2027, most unused pension funds and pension death benefits will be brought within the value of a deceased person’s estate for inheritance tax purposes. It also states that notional pension property held within qualifying non-UK pension schemes and section 615 schemes will be in scope for inheritance tax, subject to the detailed rules and residency status.  

That is why old QROPS pensions now need careful attention. The question is no longer simply whether the QROPS was suitable when it was arranged. The better question is whether it still improves the client’s position under the rules that now apply.

Quick answer

A QROPS may still be suitable for some expats, but it should not be assumed to remain optimal simply because it was once recommended. A proper QROPS review should check the original reason for transfer, the current scheme jurisdiction, whether the scheme remains a QROPS or has become a former QROPS, investment performance, layered charges, tax treatment, death benefit rules, beneficiary planning, drawdown options, currency exposure, future country of retirement and whether the individual remains within the UK long-term residence inheritance tax net.

The biggest change is that older estate planning assumptions may no longer hold. From 6 April 2025, UK inheritance tax exposure is based on long-term residence rather than domicile, meaning long-term UK residents may have non-UK assets brought within scope for inheritance tax. From 6 April 2027, HMRC’s technical note confirms that notional pension property in registered pension schemes, qualifying non-UK pension schemes, and section 615 schemes will be brought into scope for inheritance tax, subject to residence status and the detailed rules.  

A QROPS review should therefore answer a clear question: does the offshore pension still improve the client’s position, or would a UK-registered pension, such as a SIPP, now provide better governance, lower cost, clearer administration, stronger beneficiary planning or more suitable drawdown?

This article is mainly about existing QROPS, not new QROPS transfers

There are two different questions that are often confused.

The first is whether someone should transfer a UK pension into a QROPS today. That is a new transfer decision, and it must be reviewed in light of current rules, including the 25% overseas transfer charge.

The second is whether someone who already has a QROPS should keep it, restructure it, review the investments, change jurisdiction, or consider moving back into a UK-registered pension.

This article is mainly about the second question.

Many expats already hold QROPS that were arranged 10 or 15 years ago. The original adviser may no longer be involved. The trustee may still administer the scheme, the investments may still be running, and the annual statements may still arrive. But the original reason for the transfer may not have been re-evaluated against today’s tax rules, residency rules, investment costs, family circumstances, or retirement plans.

That is the opportunity and the risk. The QROPS may still be exactly right. But if it is being kept only because it was once described as “outside the UK” or “better for expats”, the structure deserves a proper review.

Many QROPS holders know the label, not the reason

Many expats know they have a QROPS, but they no longer know exactly why.

They may remember being told it was more tax-efficient, better for expats outside the UK, or more flexible than their old pension. But years later, they may not know what type of scheme they hold, whether it is still a QROPS, what fees are being charged, whether the tax treaty position still applies, how the death benefits work, or whether the structure still improves the outcome compared with a modern UK SIPP.

That is not unusual. These structures were often arranged at a point in life when the client had just left the UK, was building a career overseas and was relying heavily on the advice received at the time. The issue is that a pension structure should not be kept indefinitely on the strength of a decision made under a different tax regime, a different residence position and a different family situation.

“Risk comes from not knowing what you’re doing.” - Warren Buffett

That is a useful way to think about old QROPS structures. The risk is not simply that a client has an offshore pension. The risk is that they no longer know why it exists, what it costs, what tax assumptions it relies on, how it would be treated on death, or whether it still improves their position under today’s rules.

A QROPS review is not about undoing the past. It is about checking whether the original reason still exists.

Why many expats transferred into QROPS years ago

QROPS became popular because they appeared to solve a number of issues for people leaving the UK.

A British expat who no longer intended to retire in the UK might have wanted a pension structure that felt more aligned with an international life. They may have wanted wider investment choices, different lump-sum rules, treaty-based tax treatment, international administration, more control over death benefits, or a pension that was no longer tied to an old UK workplace provider.

For many clients, the attraction was not one single feature. It was the idea that their pension could be moved into a framework designed for someone living, drawing income, and potentially passing wealth outside the UK. If they expected to retire abroad, draw income abroad and leave benefits to beneficiaries outside the UK, a QROPS could appear to offer a more internationally relevant structure than the UK arrangement they already held.

But QROPS should never be treated as one generic category. Malta, Gibraltar and the Isle of Man have different local tax rules, pension regulations, trustee models, lump sum rules, income withdrawal limits and double taxation treaty considerations. Two clients can both say they “have a QROPS”, but the planning outcome may be completely different depending on the jurisdiction, scheme rules, member's residence, beneficiary's residence, and future retirement country.

Malta QROPS

Malta has often been used because of its pension regulation, trustee-based structures and double taxation treaty network. In some cases, Maltese tax may not apply to pension income where taxing rights are granted to the member’s country of residence under the relevant double taxation agreement.

That can be valuable where the client lives in a country with favourable tax treatment on pension income, but it makes the client’s residence central to the outcome. If the client later moves country, the treaty position may change. A Malta QROPS, therefore, needs to be reviewed not only against where the client lives today, but against where they may retire, where their beneficiaries live, and whether the structure still justifies its costs.

Gibraltar QROPS

Gibraltar QROPS have often appealed because of the local pension tax regime. A commonly cited feature is that Gibraltar pension income may be subject to a withholding tax of 2.5% at source, with your normal marginal rate on top, although the precise treatment depends on the scheme, payment type, client residence, and local rules.

This can be attractive where the client lives in a jurisdiction that does not otherwise impose personal income tax, or where the local tax interaction is favourable. However, Gibraltar QROPS are not automatically flexible drawdown structures, unlike some modern UK pensions. Many operate under capped drawdown style limits, with income restricted by the Government Actuary’s Department (GAD) rates. Some Gibraltar QROPS materials state that drawdown income limits are recalculated periodically, with income payments taxed at 2.5% at source.

That distinction matters. A client may believe they have an international pension with strong flexibility, when the actual income they can draw may still be limited by scheme rules and GAD-based calculations. The 2.5% withholding tax may be attractive, but it should be reviewed alongside drawdown limits, taxation in the client's country of residence, death benefit rules, costs, investment governance, and the client’s retirement income needs.

Isle of Man QROPS

The Isle of Man has often appealed to UK-connected expats because of its established pensions industry, regulatory environment and familiarity within offshore financial planning. Isle of Man QROPS structures may offer open-architecture investment access, retirement benefits from age 55, and, in some cases, a maximum lump sum of 30%.

Income tax treatment can differ significantly from that of Malta and Gibraltar. Some Isle of Man QROPS materials refer to 20% withholding tax on income withdrawals for most non-residents, with 0% withholding where a double taxation agreement applies. That means the member’s country of residence and treaty position can materially affect the outcome.

Some Isle of Man structures may also restrict withdrawals. Older materials have referred to income benefits being taken between 0% and 150% of UK GAD rates, meaning income may be capped rather than fully flexible. This may suit some clients, but it may be less appropriate for someone who now needs flexible drawdown, phased tax planning or income coordination across several assets.

The jurisdiction is not the conclusion

These differences are exactly why an old QROPS should not be reviewed in a generic way. Malta, Gibraltar and the Isle of Man structures can produce very different outcomes depending on where the client lives, where they may retire, how income is taxed, whether withdrawals are capped, how beneficiaries are treated and what the scheme costs.

A jurisdictional feature is not automatically a planning benefit. A larger lump sum only helps if taking more cash supports the client’s tax, estate and retirement income plan. Treaty-based income treatment only helps if the relevant treaty applies to the client’s actual residence position. A low withholding tax only helps if the wider tax position and drawdown limits still support the plan. Open-architecture investment choice only adds value if the portfolio is properly governed and overall costs remain justified.

That is the real review point. The original rationale may still be valid, but it should not be assumed. A QROPS that was attractive under one tax regime, one residence position and one family situation may become less compelling as rules change, UK pensions become more flexible, costs evolve, beneficiaries move, and retirement plans become clearer.

The question is not whether QROPS were useful historically. Many were. The question is whether the specific QROPS still provides a meaningful advantage to the client who owns it today.

How the QROPS case has narrowed over time

The QROPS landscape has changed significantly.

The overseas transfer charge was introduced in 2017. GOV.UK explains that the overseas transfer charge is a 25% tax charge on transfers to QROPS unless an exclusion applies. The Autumn Budget 2024 then removed the previous exclusion for transfers to QROPS established in the EEA and Gibraltar, so that the exclusion no longer applies to transfers made on or after 30 October 2024.  

This matters because Malta and Gibraltar were historically part of the QROPS conversation for many UK-connected clients. The removal of the EEA and Gibraltar exclusions does not automatically affect an existing QROPS, but it does change the wider planning environment. It makes new QROPS transfers more difficult to justify in many cases and reinforces the need to review existing offshore pensions through today’s lens, not yesterday’s.

UK pensions have also become more flexible. Since the pension freedoms were introduced in 2015, many modern UK defined contribution pensions, including well-structured SIPPs, can offer flexible access drawdown, broad investment access, improved reporting, and better adviser-led portfolio governance. This does not make QROPS obsolete. It does mean the old assumption that overseas pensions automatically provide superior flexibility is no longer safe.

The UK inheritance tax framework has also changed. The old domicile-based world has been replaced by long-term residence, and the pension inheritance tax changes from April 2027 are expected to bring many unused pension funds and death benefits into estate calculations. For some clients, this may weaken the original QROPS estate-planning rationale.  

The long-term residence tail matters for Middle East expats

One of the biggest misunderstandings is the belief that living outside the UK automatically removes exposure to UK inheritance tax.

That is not always true.

Under the post-April 2025 rules, GOV.UK states that long-term UK residents may still have overseas assets subject to UK inheritance tax. It also says someone can keep long-term UK residence for up to 10 tax years after leaving the UK, with shorter periods applying depending on how long they previously lived in the UK. For example, GOV.UK states that someone who previously lived in the UK for 10 to 13 years will stop being a long-term UK resident three years after leaving, while someone with 15 years of UK residence stops being a long-term UK resident after five years.  

For a Middle East expat, this can be crucial. A British executive may have lived in the UK for 20 years before moving to Dubai. They may feel fully non-resident from an income tax perspective. They may have no UK salary, no UK home, and no intention of returning in the near term. But for inheritance tax, they may still be within the long-term residence tail after leaving the UK.

This matters because if the individual dies during the tail period after 6 April 2027, a QROPS or other qualifying non-UK pension scheme may need to be considered under the new worldwide pension inheritance tax framework, depending on the facts and the scheme's exact status.

The practical message is simple: QROPS holders should not only ask where they live today. They should ask whether their residence history still connects them to the UK inheritance tax system.

QROPS should not automatically be assumed outside the 2027 pension IHT framework

This is the most important technical point in the article.

Some expats still believe that because their pension was transferred offshore, it is automatically outside UK inheritance tax. That may have been part of the historic planning narrative, but it now needs to be tested very carefully.

HMRC’s May 2026 technical note states that notional pension property held within qualifying non-UK pension schemes and section 615 schemes will be in scope for inheritance tax. It also states that new section 150A IHTA 1984 treats a member as being beneficially entitled to notional pension property held within a registered pension scheme, a qualifying non-UK pension scheme or a section 615 scheme immediately before death, subject to residency status.  

That wording matters. It means a QROPS should not automatically be treated as outside the post-2027 pension inheritance tax regime simply because it is not a UK-registered pension.

The safest way to think about this is that residence status, scheme status, and the nature of the pension arrangement now matter enormously. A QROPS held by someone who is not a long-term UK resident may be in a very different position from a QROPS held by someone who is still within the UK long-term residence framework or IHT tail.

This is exactly why old QROPS need to be reviewed. The answer is not “QROPS are now bad”. The answer is that the tax protection some people thought they had may no longer be as straightforward as they believed.

Is it still a QROPS, or is it a former QROPS?

Before any serious review can begin, the first question is basic but important: what exactly is the pension?

Some clients say they have a QROPS because they were told that years ago. Others may hold a former QROPS, an Isle of Man personal pension, a QROPS Lite structure, a qualifying non-UK pension scheme, or another international retirement plan that is not quite what they think it is.

This matters because scheme status can affect onward transfers, UK tax reporting, whether UK charges could apply, how death benefits are treated and whether the structure remains appropriate.

GOV.UK’s Autumn Budget 2024 overseas pension changes also highlight that if a QROPS loses status because it no longer meets requirements, members may no longer be able to transfer funds from a registered pension scheme without incurring an unauthorised payment tax charge. The same guidance notes that changes may affect transfers from QROPS, former QROPS and relieved relevant non-UK schemes.  

This is why the review should not begin with “Should I move it back to a SIPP?” It should begin with “What is this structure legally and tax-wise today?”

Isle of Man QROPS Lite and other pension structures need precise identification

The Isle of Man can add another layer of complexity, as clients may hold structures marketed as QROPS, QROPS Lite, or other local pension arrangements.

Sovereign’s Isle of Man QROPS page refers to both the Aegean Personal Pension Plan and the Aegean Lite Personal Pension Plan. It states that both have been approved as retirement benefit schemes by the Isle of Man Insurance and Pensions Authority and Assessor of Income Tax and meet HMRC requirements to operate as QROPS.  

For the client, the label may feel unimportant. For planning, it can be very important.

A proper review should confirm the exact scheme, whether it remains a QROPS, whether it is a qualifying non-UK pension scheme, whether any onward transfer creates UK tax charges, how withdrawals are taxed, and how the structure interacts with the 2027 pension inheritance tax rules.

If the adviser does not know exactly what the client holds, they cannot reliably advise whether it should be kept, altered or transferred.

QROPS can still have benefits, but they need to matter today

A QROPS can still be useful.

For some expats, the jurisdiction may still work well. The investment choice may be suitable. The tax treaty position may remain helpful. The administration may be efficient. The client may be outside the UK long-term residence net, have no realistic intention of returning to the UK, and have beneficiaries for whom the existing structure remains suitable.

The key is that the benefits need to be relevant today.

A Gibraltar QROPS may offer specific local pension tax treatment. A Malta QROPS may offer treaty-based treatment where the relevant double taxation agreement grants taxing rights to the member’s country of residence. An Isle of Man QROPS may be subject to different withholding treatment depending on whether a double tax agreement applies.  

Those features may be valuable for some clients. But they are not automatically valuable for every client.

A larger lump sum does not help if the client does not need it, or if taking it creates personal estate, tax or reinvestment issues. Treaty treatment does not help if the client moves to a country where the position changes. Offshore administration does not help if the structure is expensive, poorly reviewed or difficult for beneficiaries to deal with.

A benefit only matters if it is still a benefit to the person who owns the pension today.

When an old QROPS may now be questionable

An old QROPS is worth reviewing carefully if the original recommendation was mainly based on moving pension wealth outside the UK, reducing UK inheritance tax exposure, accessing offshore tax treatment or obtaining flexibility that a modern UK pension could now also provide.

It is also worth reviewing whether the client is still a long-term UK resident for inheritance tax purposes, remains within the UK IHT tail, may return to the UK, has UK resident beneficiaries, or intends to retire somewhere other than the country used in the original advice.

Costs are another warning sign. A QROPS may include trustee fees, scheme administration fees, platform charges, investment fund costs, discretionary fund manager fees, adviser charges, dealing costs, currency conversion costs and possible exit fees. None of these makes the structure wrong on its own. But a QROPS does not need to be wrong to become poor value. It may simply have become too expensive relative to the planning benefits it still provides.

Performance also needs testing. If the investments have lagged suitable benchmarks or comparable model portfolios over meaningful periods, the real cost of the structure may be higher than the headline fee schedule suggests.

Then there is the orphaned QROPS problem. Many QROPS were arranged years ago by advisers who no longer service the client. The trustee may still administer the scheme and the investment platform may still report values, but no one may be actively asking whether the tax rationale, beneficiary structure, investment performance, costs and future retirement plan still align.

That is often where the risk sits. Not in the fact that the client has a QROPS, but in the fact that nobody has properly reviewed why they still have it.

Why some expats are moving QROPS back into SIPPs

More expats are now reviewing whether to move their old QROPS structures back into UK-registered pensions, such as SIPPs, than ever before.

This is not because QROPS are automatically wrong. It is because the original reasons for being offshore may have weakened, while the advantages of a well-governed UK pension structure may have become more relevant.

A SIPP may offer clearer costs, stronger platform reporting, easier integration with UK pension planning, adviser-led investment governance, flexible access drawdown, and simpler administration where the client may return to the UK or has UK-based beneficiaries. For some clients, a SIPP may also remove unnecessary offshore trustee, jurisdictional, or administrative complexity, as the annual trustee fee can be 10x more expensive than with a SIPP.

There may also be a practical governance point. If the client has other UK pensions, UK-connected estate planning, UK beneficiaries or a likely UK retirement, a UK-registered pension structure may be easier to monitor and coordinate.

But moving a QROPS back into a SIPP is itself a transfer. It needs the same burden of proof as any other pension move.

The review needs to consider exit charges, loss of jurisdiction-specific features, tax treatment, income options, death benefit processes, investment changes, currency exposure and whether the receiving SIPP will accept the transfer. A move back to the UK should not be recommended just because the word QROPS now feels dated.

The SIPP has to earn the transfer, just as the QROPS has to justify being kept.

Why QROPS should not automatically be transferred back

Some clients may still be better served by keeping the QROPS.

This may be the case where the client is outside the UK long-term residence net, has no realistic plan to return to the UK, has a strong treaty position between the QROPS jurisdiction and their country of residence, receives favourable tax treatment, has suitable investment options, pays reasonable fees and has clear beneficiary planning.

The QROPS may also have features that would be lost or altered on transfer. There may be exit charges, transfer restrictions or administrative issues. The receiving SIPP may not improve the client’s position. A UK-registered pension may also be less aligned if the client’s life, assets and beneficiaries are genuinely outside the UK.

This is why the review should not begin with “bring it back”. It should begin with “Does the current structure still work?”

Malta, Gibraltar and Isle of Man QROPS, what should be reviewed?

Once the original reason for the QROPS has been understood, the next step is to examine the jurisdiction itself. Malta, Gibraltar and the Isle of Man are often grouped together under the QROPS label, but they can operate very differently in practice.

The review should not treat “QROPS” as one generic pension category. The scheme's jurisdiction can affect income tax treatment, lump-sum rules, withdrawal limits, trustee processes, reporting, beneficiary administration, investment access, and how the pension interacts with double taxation agreements.

Malta QROPS

A Malta QROPS should be reviewed with respect to treaty treatment, residence, costs, and beneficiary planning. In some cases, Maltese tax may not apply to pension income where taxing rights are granted to the member’s country of residence under the relevant double taxation agreement. That can be useful, but it also means the member’s current and future residence is central to the outcome.

The key question is whether the treaty position still works for the client today. A structure that was effective while the client lived in one country may not work in the same way if they later retire in Spain, Portugal, France, Italy, the UK, South Africa or Australia. The review should also check whether the investment strategy remains suitable, whether the fee structure is still justified, whether the trustee process is clear, and whether beneficiaries would be able to deal with the structure efficiently if the member died.

For UK inheritance tax, the position also needs fresh analysis. If the member is a UK long-term resident, or still within the post-departure IHT tail, a Malta QROPS should not automatically be assumed to sit outside the post-2027 pension inheritance tax framework simply because it is offshore.

Gibraltar QROPS

A Gibraltar QROPS should be reviewed around income tax, drawdown restrictions and whether the retirement income rules still fit the client’s needs.

A commonly cited feature of Gibraltar QROPS is that pension income may be subject to a low withholding tax, often referred to as 2.5% at source, although the precise treatment depends on the scheme, payment type, member residence and applicable rules. That headline tax rate can look attractive, but it is only one part of the analysis.

The review also needs to check whether the pension is subject to capped drawdown-style limits. Some Gibraltar QROPS operate with income restricted by the Government Actuary’s Department, or GAD, rates. That means the pension may not provide the same income flexibility as a modern UK SIPP offering flexible access drawdown.

For a client who wants a predictable income within those limits, that may be acceptable. For someone who needs phased withdrawals, tax-planned drawdown, ad hoc access, or income coordination with other pensions and investments, the restrictions may be more material.

The review should therefore ask whether the 2.5% withholding treatment still creates a net advantage after considering residence country tax, drawdown limits, fees, investment performance, beneficiary rules and the client’s actual retirement income needs. For a UK long-term resident, or someone still inside the IHT tail, the pension should also be reviewed under the post-2027 pension inheritance tax framework.

Isle of Man QROPS

An Isle of Man QROPS should be reviewed in relation to withholding tax, treaty position, withdrawal flexibility, scheme type, and the member’s UK inheritance tax position.

Some Isle of Man QROPS structures have applied withholding tax on income withdrawals for non-residents, with different treatment where a double taxation agreement applies. That means the member’s country of residence can materially change the outcome. A structure that works well for one residence country may be less attractive if the client moves elsewhere.

Withdrawal flexibility also needs to be checked. Some older Isle of Man QROPS materials have referred to income benefits being linked to GAD-style limits, meaning income may be capped rather than fully flexible. That may still be suitable for some clients, but it can be limiting for those who now need flexible drawdown, phased tax planning, ad hoc withdrawals or better coordination with other assets.

The review should also confirm the exact scheme type. Some clients use “Isle of Man QROPS” as a catch-all term when the actual structure may be a QROPS, QROPS Lite, former QROPS, or another international pension arrangement. That distinction matters for tax, transfers, death benefits and future planning.

For UK inheritance tax purposes, Isle of Man pensions require the same careful review as other qualifying non-UK pension schemes. If the member is a UK long-term resident or still within the post-departure IHT tail, the structure should not be automatically assumed to remain outside the UK pension IHT framework after 6 April 2027.

What matters is the client outcome, not the jurisdiction label

The jurisdiction tells you where the pension sits. It does not tell you whether the pension is still suitable.

A Malta QROPS may stand or fall on treaty treatment and future residence. A Gibraltar QROPS may depend heavily on whether the low withholding tax remains valuable once drawdown limits and the residence country's tax are considered. An Isle of Man QROPS may vary in withholding tax, treaty relief, scheme type, and withdrawal flexibility.

For UK inheritance tax from 2027, the broader review point is similar across jurisdictions. If the scheme is a qualifying non-UK pension scheme and the member is a UK long-term resident or still within the IHT tail, the pension should not be automatically assumed to fall outside the UK pension IHT framework.

The review should not ask whether Malta, Gibraltar or the Isle of Man is “best” in isolation. It should ask whether the specific pension, in the specific jurisdiction, still improves the client’s position today.

A QROPS review should consider where you may retire next

QROPS planning is often built around where the client lives at the time. Expats know better than anyone that this can change.

A UAE resident may later retire in Spain, Portugal, France, Italy, the UK, South Africa or Australia. A QROPS that works well while the client lives in Dubai may not work in the same way if they retire to Europe. Treaty treatment may change. Local tax treatment may change. Currency needs may change. Beneficiary planning may change. The value of being in Malta, Gibraltar or the Isle of Man may also change.

A proper review should therefore consider the client’s likely next country of residence, not just their current address.

This is one of the most common blind spots in old QROPS planning. The structure may have been appropriate for the client’s life at the time, but expat lives rarely remain the same for 20 years.

What a proper QROPS review should include

A proper QROPS review should begin by identifying the exact structure.

• Is it still a QROPS?

• Is it a former QROPS and now a ROPS?

• Is it an Isle of Man QROPS Lite arrangement?

• Is it another qualifying non-UK pension scheme?

• What jurisdiction is it in, and which rules apply?

The review should then revisit the original rationale for the transfer. Was the QROPS arranged for inheritance tax, income tax, lump-sum flexibility, investment choice, currency, residency, beneficiary planning, or simply because the client was leaving the UK? The answer matters because the original reason may no longer be valid, or it may still be highly relevant.

The next layer is cost and performance. The review should identify trustee fees, scheme fees, platform charges, fund costs, discretionary management fees, adviser charges, dealing costs, currency conversion costs and exit charges. It should then assess investment performance against suitable benchmarks or comparable model portfolios over meaningful periods.

The tax review should consider current residence, future residence, double taxation agreements, UK long-term residence status, IHT tail position and the 2027 pension inheritance tax rules. It should also consider beneficiaries, as their residence and tax position may affect the outcome.

Finally, the QROPS should be compared with realistic alternatives. Keeping the QROPS may be best. Restructuring its investments may be enough. Moving jurisdiction may be worth exploring. Transferring to a UK SIPP may be more suitable.

Doing nothing may also be the right answer, but only if the structure has been tested properly.

The pattern I often see with expats

The pattern I often see is that the QROPS was arranged years ago and has rarely been questioned since.

The client remembers being told that the pension was “outside the UK”, “better for expats” or “more tax efficient”. They may not remember the exact tax rationale, the scheme rules, the fee structure, the death benefit treatment or what happens if they return to the UK. The pension has continued quietly in the background while their lives have moved on.

Then the rules change.

Domicile becomes a long-term residence. Pension death benefits become relevant for inheritance tax from 2027. Children become UK residents as they start University. Retirement plans shift from Dubai to Europe or the UK. The old QROPS may still be suitable, but it can no longer be left resting on assumptions from 10 or 15 years ago.

That is the real planning issue. Not that QROPS are wrong, but that old advice needs to be tested against new rules.

The common mistake

The common mistake is assuming that because a QROPS was once tax-efficient, it must still be tax-efficient.

That is not how cross-border planning works.

A structure is only as good as the rules, residence position, family situation and objectives it is built around. When those change, the structure needs to be retested.

This is especially true for pensions, as the consequences extend beyond tax. A QROPS review can affect retirement income, investment performance, charges, beneficiaries, currency exposure, estate planning and the administration your family may need to deal with after death.

What should you have at the end of a QROPS review?

At the end of a proper QROPS review, you should understand whether the structure remains suitable, whether the original tax rationale still applies, whether the UK long term residence rules affect you, whether the 2027 pension inheritance tax changes matter, whether the fees remain justified, whether investment performance has been acceptable, whether beneficiary planning is clear and whether the QROPS should be retained, restructured or transferred.

The review should also tell you what not to do.

Sometimes the right answer is not to move the pension. Sometimes it is to keep the QROPS but change the investment strategy. Sometimes it is to update beneficiaries and review tax residency. Sometimes it is to compare a transfer back to a UK SIPP. Sometimes, more information is needed from the trustee before any recommendation can be made.

The value of the review is not movement. It is clarity.

Before you assume your QROPS still works, retest the reason it was created

Many expats transferred pensions into QROPS years ago for reasons that may have been valid at the time. But the UK tax framework has changed, pension death benefit rules are evolving, and the assumptions underlying old offshore pension transfers may no longer hold.

Thomas Sleep works with UK-connected expats across the Middle East to review offshore pension structures, including Malta, Gibraltar and Isle of Man QROPS, in the context of UK long-term residence, inheritance tax, retirement income, beneficiary planning, investment performance, charges and future retirement location.

The purpose is not to move a QROPS back into a SIPP by default. It is to answer a more important question:

Does your offshore pension still improve your position under today’s rules, or are you relying on an old structure built around assumptions that may no longer apply?

Book a complimentary QROPS pension review with Thomas before the 2027 pension inheritance tax changes take effect, and find out whether your offshore pension should be kept, restructured, transferred back to a UK SIPP, or left exactly where it is with confidence.

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Final takeaway

A QROPS may still be a useful structure for some expats. But an old QROPS should not be left untouched simply because it was once recommended.

The UK’s inheritance tax framework has changed. Pension death benefit rules are changing from 2027. HMRC’s technical note now refers to qualifying non-UK pension schemes, not only UK-registered pension schemes. The client’s residence history, future retirement country and beneficiary position may also have changed.  

The question is not whether QROPS are good or bad.

The question is whether your QROPS still does the job it was set up to do, or whether it is now an old structure built for a tax world that no longer exists.

About Thomas Sleep and Skybound Wealth

Living internationally changes everything about how money works.

Income can rise quickly. Tax can fall away. Assets build across countries, currencies, and legal systems. On the surface, life often looks successful. Underneath, complexity accumulates quietly, and small decisions made in isolation begin to shape outcomes years in advance.

Thomas Sleep is a UK-qualified Financial Adviser at Skybound Wealth, specialising in cross-border financial planning for expatriates and internationally mobile families. Based in Dubai, he advises professionals, senior executives, and business owners across the Middle East, the UK, Europe, and offshore jurisdictions.

With over sixteen years of experience living and working abroad, Thomas helps clients bring clarity to complex financial lives. His work spans investment strategy, tax efficiency, retirement planning, and long-term wealth protection, aligning these areas into a single, forward-looking plan that adapts as circumstances and locations change.

Thomas is UK-qualified and regulated and holds the CISI Level 4 Financial Planning &

Advice Diploma. Through Skybound Wealth, he provides regulated advice within a firm known for its strong governance, international regulatory coverage, and client-first approach. His advice is measured, analytical, and outcome-driven, helping clients understand not only what decisions to make today but also how those decisions affect flexibility, tax exposure, and security over the decades that follow.

As both an adviser and an expat himself, Thomas understands where problems typically emerge. Wealth grows faster than planning. Assets are built in silos. Tax considerations evolve quietly until they can no longer be ignored. By the time these issues surface, options are often narrower and more expensive to implement.

Much of Thomas’s work focuses on identifying these risks early and addressing them deliberately. Through Skybound Wealth, he helps clients build resilient portfolios that travel with them, reduce future tax friction, and ensure their wealth supports their family and lifestyle long after their working years end.

This advice is for people who want clarity, control, and confidence that their financial life will continue to work as circumstances change, not just when everything feels stable.

FAQs

What is a QROPS?

A QROPS is a Qualifying Recognised Overseas Pension Scheme. It is an overseas pension scheme that meets certain HMRC requirements and can receive transfers from UK-registered pension schemes. QROPS have historically been used by expats seeking overseas pension administration, international investment options, jurisdiction-specific tax treatment, or retirement planning outside the standard UK pension framework.

Should expats with old QROPS review them now?

Yes, especially where the QROPS was arranged years ago and has not been reviewed recently. The UK’s move from domicile to long-term residence for inheritance tax from April 2025, and the pension inheritance tax changes from April 2027, mean that older QROPS estate-planning assumptions may no longer hold for every expat. The review should check residence status, scheme status, tax treatment, fees, investments and beneficiaries.

Are QROPS still outside UK inheritance tax?

Not automatically. The answer depends on the client’s residence status, the scheme status and the facts. HMRC’s May 2026 technical note states that notional pension property held within qualifying non-UK pension schemes will be in scope for inheritance tax and that new section 150A IHTA 1984 refers to registered pension schemes, qualifying non-UK pension schemes and section 615 schemes, subject to residency status.  

Could a QROPS transfer trigger a 25% tax charge?

Yes, in some circumstances. Transfers to QROPS can be subject to the 25% Overseas Transfer Charge unless an exclusion applies. The rules became stricter from 30 October 2024, when the previous exclusion for transfers to QROPS established in the EEA and Gibraltar was removed. This does not automatically affect every existing QROPS, but it is highly relevant when reviewing new transfers, onward transfers or whether a QROPS should be moved elsewhere.  

Why are some expats moving QROPS back to SIPPs?

Some expats are reviewing transfers back to UK SIPPs because the original QROPS tax or estate-planning benefit may have weakened, while a modern UK SIPP may offer clearer costs, better reporting, adviser-led investment governance, flexible drawdown, and simpler integration with UK-connected retirement and estate planning. However, moving back to a SIPP is not automatically right and should be reviewed carefully.

What are the risks of keeping an old QROPS?

The main risks are outdated tax assumptions, layered charges, weak investment performance, poor governance, unclear beneficiary planning, future changes in residence, possible UK long-term residence inheritance tax exposure, and unnecessary offshore complexity. The QROPS may still be suitable, but the reasons for keeping it should be tested.

What should a QROPS review include?

A QROPS review should identify the exact scheme, jurisdiction, QROPS status, original transfer rationale, current residence, future residence plans, UK long term residence status, IHT tail exposure, 2027 pension inheritance tax impact, charges, investment performance, drawdown rules, tax treaty treatment, beneficiary planning, currency exposure, exit charges and whether a UK SIPP or another structure would be more suitable.