Our Guide to Offshore Pensions for UK Expats

Many UK expats discover that their traditional pension arrangements may not align fully with an international lifestyle. Exchange rate fluctuations, limited currency options and constrained access rules can erode long term outcomes.

Offshore pensions can offer additional flexibility for globally mobile professionals, business owners and retirees, though they are not automatically superior to UK pensions.

Because offshore planning depends heavily on residency, tax rules and regulatory conditions, suitability must always be assessed individually. This guide provides educational context only.

At Hoxton Wealth, we have guided thousands of international clients through the complexities of cross border pension management. Services are delivered only by the appropriately regulated Hoxton entity based on client location and regulatory permissions.

Our advisory approach focuses on compliance, transparency and tailoring solutions to each client’s residency, income and long term plans.

An offshore pension is a retirement savings plan established outside the UK, typically designed for individuals who live or work abroad.

It can help enable expats to manage their pension assets in jurisdictions that often offer tax advantages, multi-currency flexibility, and simplified access to funds while living overseas.

• Jurisdictions: Commonly used locations include Malta, Gibraltar, and the Isle of Man, all
  recognised by HMRC for robust compliance frameworks.
• Advantages: Offshore jurisdictions are chosen for political stability, regulated pension
  legislation, and strong investor protections.
• Risks: Not every offshore scheme meets HMRC standards. Transferring into an unapproved
  or unregulated structure can trigger punitive tax charges or restrict future access.
• Due diligence: Always confirm that your pension provider and jurisdiction fully comply with
  both UK and local laws before transferring.

Qualifying Recognised Overseas Pension Schemes (QROPS)

QROPS allow UK pension holders who have moved abroad to transfer their benefits into HMRC recognised overseas schemes. Providers must report all payments and transfers to HMRC for 19 years after UK departure.

How it works today

QROPS operate under tighter scrutiny than in the past. A 25% Overseas Transfer Charge (OTC) may apply if the scheme is not in the EEA and the member is not resident in the same jurisdiction. HMRC also applies anti avoidance rules to prevent misuse of overseas transfers.

The FCA has made clear that many offshore transfers may be unsuitable, particularly where transferring out of Defined Benefit schemes. A full Transfer Value Analysis (TVAS) or equivalent suitability assessment is required before any pension transfer decision.

Key advantages

QROPS may offer multi currency choice, global investment access and smoother succession planning, depending on jurisdiction.

Typical jurisdictions

Malta, Gibraltar, Guernsey, Isle of Man.

Best suited for

Long term expats with larger pension pots and international financial exposure, subject to suitability assessment.

Qualifying Non UK Pension Schemes (QNUPS)

QNUPS allow individuals to contribute personal capital offshore to support long-term investment and estate planning. Unlike QROPS, a QNUPS cannot receive direct transfers from UK pensions. Instead, contributions are made using income or capital that is already outside the UK pension system.

How it works today

QNUPS operate under HMRC guidelines but separately from UK pension rules. Their appeal often lies in potential estate planning benefits.

However, the inheritance tax treatment of QNUPS can change and is subject to future legislative review. They do not provide guaranteed inheritance tax exemption.

Typical jurisdictions

Guernsey, Isle of Man, Gibraltar.

Best suited for

High net worth individuals seeking long term asset planning, subject to personalised tax advice.

International SIPPs

An International SIPP is a UK regulated Self Invested Personal Pension designed for individuals living overseas. It is not an offshore pension but a UK regulated structure for expats.

How it works today

International SIPPs remain under FCA supervision and provide global investment access, multi currency accounts and consistent regulatory oversight. They allow members to invest across multiple asset classes, hold accounts in different currencies, and receive pension income in the currency of their choice.

Key advantages

They can be more cost effective than QROPS and may suit individuals maintaining UK ties or considering a future return.

Best suited for

Expats seeking flexibility within a UK regulated framework.

• Currency flexibility: Hold and receive income in multiple currencies.
• Tax efficiency: Depending on residency and jurisdiction, offshore pensions may offer more favourable tax treatment, though this is not guaranteed.
• Investment choice: Access to broader global funds and portfolios.
• Global access: Useful for expats relocating across countries.
• Consolidation: Combine multiple pensions into one internationally administered scheme.
• Growth potential: Access to a wider range of asset classes.

• Ensure HMRC recognition to avoid unauthorised payment charges.
• Understand tax implications under local rules and tax treaties. Professional tax advice is essential to avoid double taxation or unexpected liabilities.
• Offshore structures may involve higher fees.
• Currency risk can affect capital and income.
• Access rules vary by jurisdiction. Make sure you fully understand when and how you can access your pension benefits, particularly if you plan to retire early or in multiple countries.
• QROPS reporting obligations apply for 10 years after UK departure.
• Choose a reputable, regulated provider.
• Not all pension schemes allow or recommend offshore transfers, and many UK Defined Benefit schemes consider transfers irreversible and high risk.
• Always obtain personalised, regulated advice before making a decision.

Choosing the Right Approach

If you are considering your pension options as a UK expat, speak with a regulated adviser to understand which structure, if any, is appropriate for your circumstances.

Offshore pensions may provide useful options for UK expats seeking flexibility, choice and potential tax advantages. QROPS, QNUPS and International SIPPs can each play a role, depending on an individual’s residency, objectives and long term plans.

Because of the regulatory and tax considerations involved, outcomes are strongest when decisions are made with informed guidance. We help clients evaluate their options, implement appropriate structures and manage them over time.

Book a consultation now to see if we can help you design a secure, efficient offshore pension strategy tailored to your international lifestyle.

This article is for information only and does not constitute personal financial advice. Offshore pension planning depends on your individual circumstances, residency status and local regulations. Hoxton Wealth does not provide tax or legal advice.

Tax treatment depends on personal circumstances and may change. Recommendations are provided only by the appropriately regulated Hoxton Group entity, depending on the client’s location at the time of advice.

The value of investments can fall as well as rise, and you may get back less than you invested. Overseas pension transfers can involve additional tax charges and loss of certain UK protections. Always obtain regulated advice before acting on pension information.