QROPS – Transferring UK Pensions to India

Introduction

A Qualifying Recognised Overseas Pension Scheme (QROPS) is an overseas pension scheme approved by HM Revenue and Customs (HMRC-UK’s tax authority). It allows individuals to transfer their UK pension schemes abroad, without incurring transfer charges, provided certain conditions are met.

Eligibility & Scope

You can transfer Defined Contribution (DC), Defined Benefit (DB), SIPP (Self-Invested Personal Pension), and SSAS (Small Self-Administered Scheme) schemes.
There are some pensions that cannot be transferred, such as:
UK state pension.
Pensions that have already purchased an annuity.
Pensions from which you have already taken payment from a ‘final salary scheme’.
Occupational pension schemes that do not allow transfers out (NHS Pensions, Teachers’ Pension Scheme, Armed Forces Pension Scheme, Civil Service Pension Scheme, Police and Firefighters’ Pension Schemes).
The Overseas Transfer Allowance (OTA) is set at £1,073,100. This limits the amount of your pension savings you can transfer into a QROPS without tax charges applying. Any amount you transfer after 6 April 2024 that exceeds your OTA will be subject to a flat rate tax charge of 25%.

QROPS in India: HMRC Recognition

HMRC’s legislation recognises some schemes in India as QROPS, provided the pension scheme meets UK pension age and reporting requirements.
As of May 2025, several Indian pension plans are officially listed on HMRC’s Recognised Overseas Pension Schemes (ROPS) list.

Understanding the Relevant Period (5 Full Tax Years)

After a QROPS transfer, the member must continue to meet exemption conditions (such as residing in the same country as the QROPS scheme) for a period of five full UK tax years, known as the relevant period.
If these conditions are breached during this period, for instance, due to a change in residency, the 25% Overseas Transfer Charge (OTC) may apply retroactively.

Note: It is the member’s legal obligation to notify both the UK scheme administrator and the overseas QROPS manager of any change in residency during this period. Failure to do so may result in penalties and retrospective taxation under HMRC regulations.

Overview of Indian QROPS-Approved Schemes

Some Indian schemes recognized by HMRC include:

HDFC Life Assured Pension Plan
ICICI Pru Guaranteed Pension Plan
LIC’s Jeevan Shanti
Axis Max Life Guaranteed Lifetime Income Plan
Others listed in HMRC’s official list.

Tax Implications

In the UK:
If you do not maintain residency status for 5 full tax years after the transfer or transfer into an unapproved scheme, you may be liable for a 25% Overseas Transfer Charge (OTC).
If you transfer to a recognized QROPS and meet conditions, there is no tax in the UK.
In India:
Once transferred, the pension is taxed in India, not in the UK.
After the age of 55, up to 30% lump sum withdrawals can be tax-free.
Remaining annuity/payouts (~70%) are taxable as regular income under Indian income tax laws.

Exemptions of OTC confirmed in the UK Government’s Pension Tax Manual (PTM102300 and PTM112300) include the following:

You and the QROPS scheme are both resident in the same country.
The receiving QROPS is an occupational pension scheme or a public service pension scheme, and you are employed by the sponsoring employer of that scheme.
The QROPS is established by an international organisation (e.g., UN, NATO) to provide pensions for employees, and you are or were an employee of that organisation.
Transfers that were formally requested before 9 March 2017 are not subject to the 25% charge.

Note: When any one of these exemptions is satisfied, the 25% OTC does not apply.

Detailed Transfer Process

Step-by-step process when transferring UK pension to India under QROPS:

Identify HMRC-recognised Indian pension scheme from the official ROPS list.
Submit required HMRC forms, such as form APSS263, to your UK pension administrator, including details of scheme and residence status.
The UK pension provider reports transfer details and whether OTC applies to HMRC within 90 days.
Funds are transferred directly to the Indian scheme; because your residence and scheme are in India, OTC (Overseas Transfer Charge) is not charged.
Remain resident in India for five full tax years post-transfer. If you move again, HMRC may retrospectively charge the OTC unless conditions still apply.

Conclusion

Transferring into a QROP is beneficial for individuals who are certain that they will be moving back to India from the UK. Having uncertainties will lead to complications and may lead to being charged the OTC of 25% in case you relocate to another country or back to the UK.