International pensions SIPPs and QROPS

International pensions centre

You may be British looking to leave the United Kingdom but unsure what to do with your UK pensions. You may be someone that is looking to live in the United Kingdom but unsure what to do with their American pensions, Spanish pensions, Hong Kong pensions etc

Before we go on, we must stress that we are not independent financial advisors. The information contained on this page does not constitute financial advice or should be relied upon. We ask you to complete the online form to tell us more about your financial plans so that our hand-picked strategic partner can contact you to discuss your pensions


International Self Invested Pension Plan (SIPP)

An international Self Invested Pension Plan is also referred to as an international SIPP. Unlike many pensions, an international SIPP allows you to have your investment funds managed or self-managed.

Leaving the UK or living in the United Kingdom may provide many stresses. One of them should not be about your pension. You will want to ensure that your international pensions are safe in your previous home country or transferred to the country you are moving to, such as the United States, Spain, Hong Kong or other countries of your choice.

One of the many benefits of an international SIPP is that you benefit from protection under the Financial Conduct Authority, also called the FCA.

The benefit of a pension is that your contributions may benefit from income tax relief of the money put in. The income and capital gains generated within the pension are free from tax in the country that the pension resides. There may be issues if you live in another country as international tax authorities have different ways of treating pensions from other countries.

Another benefit of a pension is that you can take a 25% tax-free lump sum pension payment at 55. The age increases from 55 to 57 from 5 April 2028 to take a tax-free lump sum payment from your pension funds.


Who can use an international SIPP?


Pension fund holders

It is possible to transfer existing pension pots into a consolidated pension fund for greater control


Self employed

It is possible for self-employed persons to contribute their self-employment profits to their pensions in order to get tax relief.



Employees can ask their employers to make pension contributions known as a salary sacrifice to benefit from the maximum tax reliefs.

Can you transfer pensions into a SIPP?

It is possible to consolidate your pension into one UK SIPP or international SIPP. This means that workplace pension schemes may also be transferred into your chosen SIPP if you feel that the funds are not appropriately managed.

Suppose you are a member of a Defined Benefit Scheme (DB) and are considering transferring out into an international SIPP. In that case, you should contact  The Pensions Advisory Service, for impartial guidance before taking any further action. We believe transferring out of a DB pension scheme is unlikely to be in the best interests of most consumers.

You cannot transfer your state pension into a SIPP or QROPS. You cannot transfer public sector government-funded pensions from the NHS, police, school teachers or MOD. Finally, you cannot move the money paid into an annuity into a SIPP or QROPS.

What is the difference between a UK and an international SIPP?

There is no significant difference between a UK SIPP and an international SIPP. The FCA protects both the UK SIPP and international SIPP for expats living or leaving the United Kingdom.

A UK SIPP is sufficient for British citizens that intend to remain in the United Kingdom. An international SIPP is a good consideration if you are British and wish to leave the UK.

One reason that expats use an international SIPP is so that they can hold multiple currencies in the country that they reside. The SIPP pension fund will typically be held in UK Sterling. It may be beneficial for you to set up different accounts dependent on where you live or wish to mitigate foreign exchange risks.

An international SIPP investment fund may pay out without paying UK tax to HMRC.

Ultimately a SIPP is a do it yourself (DIY) pension retirement benefits. You can have complete control or hand the management of your funds to a specialist provider. Optimise Accountants is not a pensions provider as we focus on international pension tax.


Each type of SIPP: UK SIPP or an international SIPP can hold:



Bank accounts in multiple currencies



SIPPs can own shares in any country



Exchange Traded Funds (EFTs), Mutual Funds, i.e. Unit Trusts and OCEICs, which a fund manager manages to give you hand free investment support

How are International SIPPs treated for international tax purposes?

The country that you are moving to will have their own tax rules. You need to understand these before you transfer your pension as an expat. Some countries will have a tax treaty in place.

There may be a possibility that you do not need to declare your pension income in one country, but you may need to report it in another.

You may need to declare the pensions income in multiple countries. For instance, Americans need to declare worldwide income to the IRS. People residing in Spain also need to report their worldwide income to Agencia Estatal de Administración Tributaria.

Please note that you also need to understand whether or not you can still benefit from tax relief of your pension contributions into an international SIPP. Typically people will get UK tax relief on their pension contributions if they live in the United Kingdom.

Americans are not afforded the same tax relief benefits of making contributions towards an international SIPP because it is not an authorised Inland Revenue Arrangements, also called IRAs.

Many tax credits are available to expats with their pension incomes paid in multiple countries. Expats need to ensure that they speak with one of our international pension tax advisors to ensure you avoid costly mistakes.


What is a Qualifying Recognised Overseas Pension Scheme (QROPS)?

HMRC has described in detail the tax considerations for Qualifying Recognised Overseas Pensions Schemes – QROPS for short.

A QROPS is an overseas pension scheme. This is an ideal solution to be considered alongside an International SIPP (iSIPP) when you are thinking of leaving the UK and wish to transfer your UK pension funds overseas.

Please note that any transfer to a QROPS after 9 March 2017 is subject to a 25% tax charge. This 25% tax charge on QROPS transfer may be mitigated if

– QROPS and the member of the QROPS is an EEA resident

– QROPS and member is in the same country/territory

Expats living in Europe who wish to transfer money from their existing pensions (Non-QROPS) into a QROPS will not face this tax charge.

Expats wishing to live in the United States, Hong Kong or other non-EEA countries may not want to transfer funds to a QROPS because of the 25% tax charge.

USA pensions: The requirements to be a ROPS changed from 6 April 2017. You will need to check that the scheme you are transferring meets the new requirements.

HMRC cannot guarantee these are ROPS or that any transfers will be free of UK tax. It’s your responsibility to determine if you have to pay tax on any transfer of pension savings. Find out more about Overseas pension schemes.

Hong Kong: The requirements to be a ROPS changed from 6 April 2017. You’ll need to check that the scheme you’re transferring to meets the new requirements on or after that date.

HMRC cannot guarantee these are ROPS or that any transfers will be free of UK tax. It’s your responsibility to determine if you have to pay tax on any transfer of pension savings. Find out more about Overseas pension schemes.

International SIPP or QROPS – What is right for you?

We need to restate that this page does not constitute financial advice. Again, you are reminded to complete the online form and tell us about your international expat pensions. Our hand-picked strategic partner that the FCA regulates can contact you directly.

Expats and British citizens need to consider the UK tax charge on their pension pots. HMRC charges tax on pension pots in excess of £1,073,100 in the 2021/22 tax year, which increases marginally over time. The pension tax charge is referred to as Life Time Allowance, also referred to as LTA.

For people with a larger pension pot exceeding £1,073,000 and who wish to avoid the UK tax charge on their pension, Life Time Allowance may want to transfer their pension funds into a QROPS. The 55% tax charge on pension lump sum payments and 25% tax charge on income withdrawals may be mitigated using QROPS.

You will need to speak with our hand-picked international pension provider to compare the benefits and costs of such a transfer from your current pensions into a QROPS. The cost of a QROPS is significantly more expensive than an international SIPP.

The amount of tax you pay will vary

55% Tax
Lump sum payments
25% Tax
On non-lump sum withdrawals

You will pay tax on pension withdrawals if you have exceeded the Life Time Allowance of £1,073,100

Taking money out of your International SIPP / QROPs

Income withdrawn from your pension will be taxable. Pension income will be charged under PAYE rules for UK tax purposes. Expats living in countries like the US, Spain, Hong Kong etc., will also need to consider the tax charged on such income.

It is possible for expats that have left the United Kingdom to have their pensions paid to them gross. The same might also apply in a country you previously lived in and moved to the UK.

Please ensure that you speak with one of our international pension tax specialists to learn more.

Book a call to see how we can help you.


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