SIPP vs QROPS for British expats in Thailand

Most British expats in Thailand with a UK pension eventually reach the same question: should the pension stay in the UK as a SIPP, or be transferred to a Qualifying Recognised Overseas Pension Scheme? The question is worth taking seriously. For most people in Thailand, the answer is to keep the SIPP.

That is not the answer the advice industry in Southeast Asia has historically encouraged, because a QROPS transfer generates more for the person arranging it than leaving a pension in place. The right starting point is to understand what each structure does, cost it honestly, and only then decide.

A Self-Invested Personal Pension is a UK-regulated pension wrapper. It allows flexible access from the normal minimum pension age (currently 55, rising to 57 from 2028), a wide range of investments, and income drawn in sterling from a UK account. Under the 2024 Thai remittance rules, a SIPP pension drawn and remitted to Thailand by a Thai tax resident is potentially assessable for Thai tax, subject to the UK-Thailand double tax agreement.

A SIPP does not require a transfer. It sits where it is, inside the UK regulatory perimeter. The costs of maintaining a SIPP are typically lower than those of a QROPS, because you are not also paying for overseas scheme infrastructure.

A Qualifying Recognised Overseas Pension Scheme is a scheme registered outside the UK that meets HMRC’s conditions for receiving a transfer from a UK pension. If those conditions are met, the pension can move offshore and then falls under the rules of the overseas jurisdiction rather than UK pension law.

For British expats the jurisdictions most commonly proposed are Malta, Gibraltar, and a small number of others, each with different tax treatment and very different scheme charges. A QROPS is not a category of good outcome. It is a category of structure. The outcome depends entirely on the specific scheme, the jurisdiction, and whether the economics make sense once every cost is on the table.

In 2017 HMRC introduced the Overseas Transfer Charge. A transfer to a QROPS by a member who is not resident in the same country as the QROPS attracts a charge of 25% of the transfer value. For a British expat resident in Thailand transferring to a Malta QROPS, the charge applies unless a specific exemption is available.

This single rule changed the economics of most QROPS proposals for British expats in non-QROPS jurisdictions. Anyone presented with a QROPS recommendation before 2017 who has not revisited the analysis since should treat that recommendation as obsolete.

There are genuine cases where a QROPS, in the right jurisdiction, with a low-cost provider, makes sense for a British expat in Thailand. They share a set of characteristics: a pot large enough that scheme charges are proportionate, a clear long-term plan to remain outside the UK, a jurisdiction with a favourable double tax agreement, and a provider whose charges and investment options stand up to scrutiny.

If all of those conditions hold, the analysis may favour a transfer. If any one is missing, caution is warranted. The break-even point on a transfer, after the Overseas Transfer Charge where it applies, the ongoing scheme costs, and the forgone flexibility of the UK system, is rarely short.

Before any transfer, four questions deserve written answers. What does the transfer pay the person recommending it? What are the total charges in the receiving scheme, including platform, advice, and underlying fund costs? What is the projected break-even point versus leaving the pension in the UK? And what happens if you return to the UK, or if the rules change again?

The first question is the most important. What any recommendation pays me is set out in writing before you decide. That standard applies here as it does everywhere.

This article sets out the framework. It is not a recommendation to transfer, or not to transfer, your pension.

The UK pension transfer service at /en/services/uk-pension-transfer describes the structured review carried out before any recommendation is made, including where QROPS is the question, and the checklist at /en/guides/uk-pension-transfer-checklist covers the documentation involved. For a 30-minute conversation about your own pension position, book at /en/book.