QROPS Thailand in 2026, when it makes sense, when it doesn’t

The Overseas Transfer Charge, introduced in 2017, is a 25% tax on a transfer from a UK registered pension to a QROPS unless an exclusion applies. Until 30 October 2024 one of those exclusions covered transfers to a QROPS established in the European Economic Area or Gibraltar. HMRC removed that exclusion for transfers made on or after 30 October 2024, so a scheme in Malta, Gibraltar or elsewhere in the EEA no longer sidesteps the charge on that basis.

The exclusions that remain are narrow. For a private individual the relevant one is that the member is resident in the same country as the QROPS receiving the transfer; the others apply only to occupational, public service and international organisation schemes where the member works for the relevant employer. Each transfer is also tested against the member’s overseas transfer allowance. For a British expat resident in Thailand transferring to a scheme based anywhere other than Thailand, the 25% charge should be assumed to apply, and for most of the British expat population here that single rule removes QROPS from consideration.

The 2024 Thai remittance change is the second headline. A third follows on 6 April 2027, when most unused pension funds and pension death benefits come within the value of an estate for UK inheritance tax. The case for QROPS in 2026 has to account for all three.

For a British expat resident in Thailand for the foreseeable future, with a pension pot above roughly £250,000, the standard argument is still: a QROPS in a jurisdiction with an appropriate double tax agreement can produce a better long-run tax outcome than a UK SIPP, particularly for clients with no plan to return to the UK and no intention of taking a UK lump sum. That argument now has to clear the 25% charge before it starts.

It is still valid in narrow cases. It is not valid in most cases.

Anyone whose long-term plan includes returning to the UK. Anyone whose pension pot is under roughly £250,000, the fees rarely make the maths work. Anyone who has not asked, in writing, what their advisor is paid on the transfer. Anyone who hasn’t had the maths done both ways.

For most British expats in Thailand in 2026, the right answer is a UK SIPP or the existing scheme, not a transfer. The QROPS conversation is worth having only after the UK option has been costed out honestly. The fee structure on most QROPS offerings still benefits the advisor more than the client.