Overview

Your members and their employers can claim tax relief on their pension contributions if the member moves to the UK after joining your scheme. This is known as migrant member relief.

Your scheme needs to be a QOPS for your members to get tax relief. The scheme must:

• be an overseas pension scheme
• report certain information to HMRC

Overseas pension schemes

Your scheme must be based outside of the UK and cannot be a registered pension scheme. It must also meet the following rules.

The tax recognition test

Your scheme must be:

• open to residents in the country your scheme was set up in
• registered with the country’s tax authority as a pension scheme

Your scheme’s country must have a system to tax personal income and give tax relief on pensions. The country (except for Australia) must only give tax relief on either:

• pension contributions
• payments out of the scheme

Australian pension schemes must be complying superannuation plans — read the Super Fund Look website.

The regulatory requirements test

Your scheme must be regulated by a pension scheme regulator in the country your scheme is run from.

If a regulator does not exist in your country for your occupational or non-occupational pension scheme, your scheme must be either:

• based in an EU member state, Norway, Iceland or Liechtenstein
• an occupational pension scheme
• provided by a person that is regulated to provide the pension scheme
• a non-occupational scheme provided by a person that is regulated to provide the scheme

Where your scheme is a public service pension scheme set up or approved by the government of the country it’s based in, you would not need to meet this test.

International organisations

There are different rules for pension schemes run by international organisations, like the EU or UN.

To be an overseas pensions scheme, your scheme must be set up to provide benefits in respect of service to that international organisation by its employees.

Information your scheme must report

You must tell HMRC about ‘relevant benefit crystallisation events’ for migrant members of your scheme. Use form APSS252 to do this.

Relevant benefit crystallisation events occur when the member:

• dies before their 75th birthday and within 2 years, their pension savings are used to pay the equivalent of one of the following to their beneficiaries:
  • a defined lump sum death benefit  
  • a pension protection lump sum death benefit 
  • an uncrystallised funds lump sum death benefit 
  • an annuity protection lump sum death benefit 
  • a drawdown pension fund lump sum death benefit  
  • a flexi access drawdown lump death benefit
• is paid the equivalent of a:
  • pension commencement lump sum
  • uncrystallised funds pension lump sum
  • serious ill-health lump sum
  • stand-alone lump sum

You also need to tell HMRC if the pension savings have been:

• a flexi-access drawdown pension
• an uncrystallised pension lump sum
• a flexible lifetime annuity
• transferred to a qualifying recognised overseas pension scheme

You should also tell HMRC if you agree to pay a member’s annual allowance tax charge — using form APSS210.

Tell HMRC you’re a QOPS

To be a QOPS, you must tell HMRC that your scheme:

• is an overseas pension scheme
• will report information on pensions that have received UK tax relief
• will tell HMRC if your scheme stops being a QOPS

You can use form APSS250 to do this.

When you’ve given HMRC the required information they’ll send you a letter, which will include your QOPS reference number.

You must make sure your scheme meets the rules to be a QOPS at all times if your members want to receive tax relief on their contributions.

When you stop being a QOPS

You must tell HMRC if your scheme stops being a QOPS.

HMRC can also decide your scheme is not a QOPS if you do not report the necessary information to HMRC.

Scheme managers of existing QOPS should check if their scheme will meet the new conditions introduced from 6 April 2017.2025. If their scheme does not meet the new conditions, they must tell HMRC.

The result of ceasing to meet the conditions to be a QOPS will be that members and employers will no longer be able to claim tax relief on contributions to the scheme under the migrant member relief provisions.