Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

For NRIs living in UK the pension fund accumulation is a major hindrance. The stringent laws on taxation, especially on retirement assets, leave very less in the hands of the people. The larger problem arises when one wants to leave the UK to return to their own country or shift to any other country.

There is no choice but to pay this high tax to withdraw their pension fund. As per the rulebook of UK pension fund:

  1. The retirement age of receiving the pension starts at age 55
  2. On retirement, one can withdraw up to 25% of the fund value
  3. The pension income one receives is taxed at a rate of as high as 50%
  4. If you withdraw the entire amount at retirement, the rate goes up to 55%
  5. In the UK you have to even pay a death tax of 55% on the total pension fund before it is passed to your beneficiaries

With such rules, it’s difficult for NRIs who wish to leave the UK or have left the UK to withdraw their pension fund. Even during the accumulation period, there are very limited investment choices that are only denominated in pound sterling. All these scenarios were posing a huge problem for NRIs till a few years ago when UK came out with the concept of QROPS i.e Qualifying Recognised Overseas Pension Scheme.


Qrops is a pension scheme outside the UK specifically for international workers. Here you can transfer the value of the rights from the UK registered pension scheme without incurring UK tax charges. As per UK regulations, any QROPS has to be approved by HM Revenue &Customes(HMRC), and then only it is a legal entity. It works in a similar way you will have a regular pension in the UK i.e.  Once you transfer the pension amount from UK Fund to QROPS, post-retirement, you can still receive the lumpsum and the pension similar to what UK rules allow. However, you will be subject to the tax laws of the country where QROPS is established or you become the resident.

Eligibility & Transferable Pension Schemes

The scheme is eligible mainly for two categories-  One for UK nationals, who intend to or have already moved from the UK and the second to international workers returning to their home or other country. If you are an NRI from any of these categories, you can transfer your UK pension fund to QROPS. However, you will not be eligible if you have already bought an annuity plan in UK and receiving the payout as listed.

There are also various types of pension schemes in UK most of which can be transferred to QROPS. The only exception is any state pension scheme which is non-transferrable.

UK pension transfer to India 

To transfer your Qrops UK to India, you need to follow these general steps:

  1. Check your eligibility: You must check your eligibility for transferring your UK pension to a QROPS scheme in India. You must have a UK pension fund that is eligible for transfer, and the QROPS scheme in India must be a registered pension scheme that meets HMRC’s qualifying criteria.
  2. Choose a QROPS provider in India: You must research and select a reputable QROPS provider in India that offers a scheme that suits your needs. You can consider factors such as fees, investment options, and reputation when selecting a provider.
  3. Inform your UK pension provider: You must inform your UK pension provider about your intention to transfer your pension to a QROPS scheme in India. Your pension provider will provide you with the transfer forms and other documents that you need to complete and submit to transfer your pension.
  4. Complete the transfer forms: You must complete the transfer forms provided by your UK pension provider and the QROPS scheme in India. You must provide accurate and complete information on the forms and attach any supporting documents as required.
  5. Submit the transfer forms: You must submit the completed transfer forms to your UK pension provider and the QROPS scheme in India. Your UK pension provider will transfer your pension to the QROPS scheme in India, subject to the approval of HMRC.

It is important to seek professional advice from a qualified financial advisor or tax expert before transferring your UK pension to a QROPS scheme in India, as there may be tax implications and other factors to consider.


There are many benefits which NRI in UK derive when they transfer their pension funds to a Registered QROPS. The biggest of them is the relaxation in taxation laws which give more money in their hands. In some countries like Giblatar the taxation is almost Nil. Here are some of the benefits of a QROPS:

  • The tax on pension income depends on the country of residence which makes the tax payout very lower
  • The benefit of tax free lumpsum at age 55 can go upto 30%
  • There is no requirement to purchase an annuity much like in UK where if you don’t you are taxed very high
  • No inheritance tax to your beneficiaries which makes your entire pension fund available to them at your death
  • There are various investment option in some QROPS which helps in growing your fund

There will be other benefits too which make QROPS an attractive proposition for NRIs in UK.

A general comparison of QROPS and UK pension scheme benefits:

QROPS UK Pension Scheme
Maximum Lumpsum Withdarwal Upto 30% of fund value if more than 5 tax years out of UK 25% of fund value
Earliest Retirement age 55 55
Tax on Pension Income 0% Upto 50%
Tax on Death Benefit No Yes, upto 55% of Lumpsum payment
Pension Income Max 120% of UK GAD rates subject to Jurisdiction Based on 100% of UK GAD Rates
Investment of pension fund Flexible with wide range of option Limited
Consolidation of Different Pension Yes into a single pension No

The table is taken from IFAST, Singapore. The above comparison is general and may vary based on specific schemes or individual circumstances.

Who can create QROPS?

Although there are many schemes which will be listed as QROPS even in India but the rule says that unless they are approved by HRMC they do not qualify as QROPS. The two main jurisdictions which has evolved as attractive options for QROPs are Gibraltar and Malta apart from Isle of Man. Both these countries run QROPS approved by HMRC. There are specifically two services within their QROPS- Trust services where the pension fund is managed and administered in a trust structure and investment services where the fund is invested on the basis of a portfolio created by the pension holder with the help of the adviser to ensure the money grows till you are enjoying it. (Clients should not ignore expense ratios & taxation issues before moving their funds to some QROPS. I have personally checked, in some cases expenses are very high & you lose benefit if any.)Although they both are tax friendly, still there are differences especially in taxation within these two schemes. One has to read the details of the scheme to identify the real benefits from their schemes. But the larger benefit of QROPS with these jurisdictions is that they communicate with HMRC for any approval or clarification on behalf of investor.

Coming to India there are various schemes which are listed as QROPS but cannot be taken as approved as clearly stated by HMRC. Here is what they say-

“This list is based on information provided to HMRC by non-UK schemes when they notify HMRC they meet the conditions to be a QROPS. Publication on the list should not be seen as confirmation by HMRC that it has verified all of the information supplied by the scheme in its notification. The purpose of this list is merely to help UK registered pension schemes carry out their due diligence when transferring pension savings to another pension scheme that is not a registered pension scheme. The list is not to be taken as a recommendation for a particular scheme or product. Nor should it be taken that any scheme featured on the list is approved or backed by HMRC.”

What should you Do – in India?

There are specific criteria laid down by HMRC UK on what type of QROPS can be approved by them. The best is to draw a checklist and confirm if the scheme really comes in the parameters. Here is a small checklist which will identify any scheme from India are really QROPS compliant:

Rules Indian QROPS
Is the pension scheme regulated by a pension regulator?
Is the scheme pen to both local and non-resident?
Is the scheme recognized by the tax authority?
Is income distribution earliest at age 55 years old?
Does it provide lifetime income like an annuity? [ LIC Annuity Plan ]
Is the maximum lump sum payment at retirement at 30%?
Is the pension scheme taxed similarly for both local and non-Resident?
Is it invested in low cost international funds?

Source: IFAST, Singapore

This is a general checklist which can identify the probability of any QROPS getting approved by HMRC. One can draw some conclusion by using such a checklist. Remember the penalty of noncompliance is heavy as the entire pension fund will become taxable and there can be penalty imposed to. So it will be wise to clarify whether the scheme is approved by HMRC and not only listed before you make a decision.

QROPS India List

  • HDFC Life Click 2 Retire.
  • HDFC Life New Immediate Annuity Plan.
  • HDFC Life Pension Guaranteed Plan.
  • ICICI Pru Easy Retirement.
  • ICICI Pru Easy Retirement SP.
  • ICICI Pru Immediate Annuity.
  • Kotak Lifetime Income Plan.
  • SBI Life – Annuity Plus.

Hope you got some idea of QROPS India – please share if you have some additional information or ask any questions related to the same.

Published on March 15, 2023

Hemant Beniwal

Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

  • I am a US citizen. Living in india for more than 120 days. Filing ITR in India regularly. Income more than 15 lacs/ year. I am going to live in India for more than 182 days. Can I sell my flat as a resident after completion of 120 days or 182 days.

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