Changes to rules on pension transfers from the UK

If you have pensions in the UK that you want to transfer back to Ireland, there were some big changes made in the UK Finance Act recently that you should be aware of. In order to transfer benefits from the UK to Ireland, the receiving pension has to be QROPS (Qualifying Recognised Overseas Pension Scheme) approved by HMRC. There have been some changes that have to be adopted for Irish pensions to remain QROPS approved.

25% Tax Charge

HMRC have from 9 March 2017, introduced a new 25% tax charge on transfers to QROPS unless one of the following conditions applies:

  • The individual’s and the scheme’s country of residence are the same
  • The individual’s and the scheme’s country of residence, even if they’re different, are both within the European Economic Area
  • The receiving QROPS is an occupational pension scheme provided by their employer in respect of their current employment
  • The receiving QROPS is set-up by an international organisation
  • The receiving QROPS is an overseas public service pension scheme

So, in effect, this charge will only in general apply where you transfer your pension benefits outside the European Economic Area.

Left the UK for at least 10 years to access benefits

In order to be able to access your pension benefits from the UK, you must:

  1. Be age 55 of older
  2. Be non UK tax resident for at least 10 years

You are able to transfer your pension benefits from the UK to Ireland once you leave the UK. The restriction is in when payments may be made from the pension.

Restrictions on transferring out of QROPS

Once you have transferring your money across to a QROPS approved pension in Ireland, you cannot transfer it to another pension for at least another 5 years, or else you will be subject to UK tax rules.

This no longer applies if you are retiring. If you have reached age 55 and have ceased being UK resident for at least 5 years (benefits received before 6 April 2017) or 10 years (benefits received after 6 April 2017), you can mature your pension once you have reached age 55.*

How does this affect my ability to transfer my pension to Ireland?

The transferring administrator will be required to deduct and report the tax charge to HMRC. The new rules require Irish providers to deduct and report the new tax charge of 25% where money is transferred from the QROPS plan and doesn’t meet the requirements set out above. Irish pension providers do not have the authority to do this so there is ongoing negotiations between the insurance companies and the Irish Revenue Commissioners to allow the product provider to make these deductions. At the time of writing, only Standard Life have declared that they have the ability to receive UK pensions transfers under the new rules.

This  25% tax can have quite a negative effect on the value of your pension if the transfer isn’t carried out correctly, so be sure to get some advice before attempting to transfer benefits back home. As always, if you have any questions, drop me an email at

* Amended on 12 September 2017 after clarification from HMRC. They had originally stated that the transfer value had to stay in a QROPS for a minimum of 5 years regardless of reaching retirement age or not.