A UK pension can only go overseas to a QROPS, a 25% charge may apply, and US plans are rarely a clean destination. Often the answer is to leave it.
Yes, a UK pension can be moved abroad, but only to a scheme that meets HMRC's conditions (a qualifying recognised overseas pension scheme, or QROPS), and even then a 25% overseas transfer charge applies unless an exclusion is met. For someone moving to the United States there is rarely a tax-efficient US destination for the money. Leaving the pension in the UK, where the US-UK treaty is designed to operate, is often the calmer and cheaper course.
This article covers the tax mechanics only. It is not pension-transfer advice: if your pension includes safeguarded benefits, such as a final salary promise, UK rules can require advice from an adviser authorised by the Financial Conduct Authority before you transfer.
GOV.UK describes a QROPS as an overseas scheme to which you may transfer UK pension savings, and places the burden of checking on you: it's up to you to check this with the overseas scheme, your UK provider or your adviser.
Recognition is a tax status, not a mark of quality. It says nothing about charges, investments or suitability; it means only that a transfer can be a recognised transfer for UK tax purposes.
Getting that wrong is expensive. HMRC's guidance states that transfers to an overseas scheme which is not a QROPS will be treated as an unauthorised payment, with the member potentially charged at least 40% tax. Your UK scheme may also refuse the transfer.
HMRC publishes a list of schemes that have told it they meet the conditions to be a recognised overseas pension scheme. Inclusion is not approval: HMRC says it cannot guarantee these are ROPS, or that any transfer to them will be free of UK tax, and that it is your responsibility to find out whether tax is due.
The same page adds that HMRC will usually pursue UK tax charges, with interest, on transfers to entities that do not meet the requirements even where they are listed; that schemes can be removed at short notice, for example where fraud is suspected; and that accessing benefits before age 55 will result in UK tax charges in all but the most exceptional circumstances.
HMRC's manual sets the charge at 25% of the transferred value for recognised transfers to a QROPS requested on or after 9 March 2017. The scheme member and the scheme administrator are jointly and severally liable for it.
The charge does not apply where an exclusion condition is met. In outline:
A former exclusion for schemes in the European Economic Area or Gibraltar applies only to transfers requested before 30 October 2024, so it is not available for new requests.
Exclusion is only half the test. GOV.UK says you usually avoid the charge only if you live in the country where the QROPS is based and the transfer does not exceed your available overseas transfer allowance, which it says is usually £1,073,100, potentially higher if you hold a protected allowance. If you are excluded but exceed the allowance, the 25% applies to the excess. If you are not excluded, it applies to the whole transfer. GOV.UK also warns that failing to provide the required information within 60 days leads to the transfer being taxed at 25%.
The exclusion is not final on the day of transfer either. HMRC's guidance explains that the charge can arise later if your circumstances change within the relevant period, broadly five full tax years after the transfer. Moving out of the QROPS country in that window can trigger it.
For someone relocating to the US, the same-country exclusion means the receiving scheme would need to be established in the United States. That leads to the US question.
The UK side. The receiving scheme must be a QROPS. Whether any particular US arrangement meets HMRC's conditions is a question for that scheme and HMRC, and we do not assume that any type of US plan does.
The US side. The IRS describes a rollover as depositing a payment from a retirement plan or IRA into another retirement plan or IRA within 60 days, with tax generally deferred until you withdraw from the new plan. That guidance is framed around US plans and IRAs, not UK pensions, so you cannot assume that moving money from a UK scheme into a US account is tax-neutral. The US may see it as a taxable distribution, or the US plan may be unable to accept it.
There is also a quieter cost: in a UK scheme, the treaty can defer US tax on growth. Once the money leaves, that protection may not follow it. A transfer can therefore produce UK tax, US tax or both, on money that could have stayed deferred.
The better question is often not where can I move it but how is it taxed if I leave it. The 2001 UK-USA convention defines a pension scheme as an arrangement generally exempt from income tax in its home state and operated principally to provide pension or retirement benefits. Whether your arrangement meets that definition is the first thing to confirm.
Growth. Article 18(1) provides that where a resident of one state is a member of a pension scheme established in the other, income earned by the pension scheme may be taxed as that individual's income only when it is paid out, subject to Article 17. The US normally reserves the right to tax its citizens as if the treaty did not exist (Article 1(4)), but Article 1(5)(a) lists paragraph 1 of Article 18 among the exceptions. That is why growth inside a qualifying UK pension can generally be deferred for US purposes, even for a US citizen.
Distributions. Article 17(1)(a) makes pensions taxable only in the state where the recipient is resident. Article 17(1)(b) adds that an amount which would be exempt in the source state, if you were resident there, is exempt in your state of residence too, and that sub-paragraph is also excepted from the saving clause. Article 17(2), however, treats a lump sum from a scheme established in one state and paid to a resident of the other as taxable only in the state where the scheme is established, and that paragraph is not on the saving clause exception list. For a US citizen, the US treatment of the UK tax-free lump sum is therefore fact-dependent. We cover the detail in our guide to US tax on UK pensions and SIPPs.
Leaving a pension in the UK does not leave it off your US return. The IRS taxes US citizens and residents on worldwide income from all sources, and information returns follow the asset.
The government has said plainly that transfers to QROPS have often been a vehicle for pension scams. Since 2021, trustees have been able to stop a transfer where red flags are present, and to require scam-specific guidance from MoneyHelper before an amber-flagged transfer proceeds. For overseas transfers, members can be asked for a formal residency document and at least two further pieces of evidence of residence.
Stop and verify independently if you meet an unsolicited approach about your pension, a promise of early access or unusually high returns, pressure to act quickly or to transfer to a country you have no connection with, or reluctance to let you take independent advice. GOV.UK directs anyone concerned about a pension scam to Report Fraud.
Before anything moves, we would want clear answers to these questions:
1. What exactly do you hold? Defined contribution, defined benefit, or a mix. Safeguarded benefits change the process.
2. Is regulated advice mandatory? GOV.UK explains that members with safeguarded benefits worth more than £30,000 must obtain appropriate independent advice from an FCA-authorised adviser before transferring to acquire flexible benefits.
3. Is the receiving scheme actually a QROPS, confirmed with the scheme and HMRC, and not merely listed?
4. Which exclusion applies, and will it still apply if you move again within the relevant period?
5. How much of your overseas transfer allowance is available?
6. What does the US do with the money on arrival, and does moving it give up treaty deferral on growth?
7. What are the all-in costs of the new scheme compared with staying put?
8. Who approached whom? If the idea did not start with you, slow down.
If the answers are unclear, leaving the pension where it is keeps every option open.
For the reverse position, see US 401(k)s and IRAs for UK residents. Americans heading home should read returning to the US after living in the UK, and if the pension came to you on a death, see inheriting a UK pension as a US person.
We map the UK and US tax consequences of keeping or moving a pension and work alongside your FCA-authorised adviser, not in place of one. A licensed CPA or Enrolled Agent reviews and signs off every US filing; the UK side is reviewed by an ACCA-qualified accountant. Our US-UK expat tax service is built for households with a life in both countries. If a transfer has been suggested to you, book a confidential consultation before you sign anything.
This article is general information, not tax, legal, investment or financial advice, and does not create a professional relationship. It is not pension-transfer advice and does not recommend any scheme or course of action. Transfers of safeguarded benefits may legally require advice from an FCA-authorised adviser. Pension rules, allowances and treaty positions are fact-dependent and change, so confirm them against current official guidance before you act.
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Reviewed by a CPA / Enrolled Agent. Last updated: 21 September 2026.
Official sources: GOV.UK: transferring to an overseas pension scheme | HMRC: overseas pensions, pension transfers | HMRC: ROPS notification list | HMRC PTM102200 | HMRC PTM102300 | GOV.UK: pension benefits with a guarantee and the advice requirement | GOV.UK: conditions for transfers regulations 2021, government response | 2001 UK-USA Convention | IRS: rollovers of retirement plan and IRA distributions | IRS Form 8938 instructions | IRS: US citizens and resident aliens abroad