There were no fundamental changes to the pensions tax regime in the Budget, but significant changes were announced in relation to QROPS (Qualifying Recognised Overseas Pension Schemes). The Government also announced that it will amend the tax registration process for master trust pension schemes to align with the Pensions Regulator’s new authorisation and supervision regime, and confirmed that it will go ahead with its proposals to reduce the money purchase annual allowance to £4000 with effect from 6 April 2017.

QROPS changes

New 25% tax charge on transfers to or from a QROPS

If a transfer to or from a QROPS is requested on or after 9 March 2017, the transfer may be liable to a 25% tax charge called the "overseas transfer charge". For transfers from a UK registered scheme, the member and the scheme administrator will normally be jointly liable for the charge. The charge does not apply to all QROPS. Key exceptions are:

• the member is resident in the same country in which the QROPS receiving the transfer is established;

• the member is resident in an EEA country and the QROPS is established in an EEA country;

• QROPS established by certain international organisations to provide benefits for their employees;

• the QROPS is an overseas public service scheme and the member is employed by a scheme employer; or

• the QROPS is an occupational pension scheme and the member is an employee of a sponsoring employee under the scheme.

A transfer that is exempt at the point when it is made can in some circumstances become retrospectively subject to the charge if there is a change in circumstances within 5 tax years of the change.

Action Required by existing QROPS

Scheme managers of existing QROPS must decide whether they wish to continue to be a QROPS and, if so, submit a revised undertaking to HMRC by 13 April 2017. Failure to do this will mean that the scheme ceases to be a QROPS from 14 April 2017.


Trustees and administrators of UK schemes asked to make a transfer to an overseas scheme should familiarise themselves with the new QROPS rules. A transfer to an overseas scheme that is not a QROPS will be an unauthorised payment and attract penal tax charges. For any transfers that have not completed by 13 April 2017 (regardless of when the transfer request was made), it will be necessary to check whether the receiving scheme still qualifies as a QROPS after that date. Where the receiving scheme is a QROPS, it will be necessary to consider whether the transfer was requested on or after 9 March 2017 and, if so, whether it will be subject to the overseas transfer charge.