If you have a UK pension and you live in Ireland, the words “25% Overseas Transfer Charge” are the ones most likely to give you pause. They should. A quarter of your pension fund disappearing to HMRC before it even lands in Ireland is a devastating outcome — and one that is entirely avoidable if you understand the rules and plan correctly.
The good news for most Irish residents is that the charge does not apply to them. The less good news is that the rules changed significantly on 30 October 2024, and some transfers that were straightforward before that date are now considerably more complicated.
What Is the Overseas Transfer Charge?
The Overseas Transfer Charge (OTC) is a 25% tax levied by HMRC on UK pension transfers to Qualifying Recognised Overseas Pension Schemes (QROPS) where no exemption applies. It was introduced in March 2017 to prevent UK residents from using overseas pension schemes to access benefits in ways that would not be permitted under UK rules — for example, taking money out earlier or in higher proportions than UK rules allow.
The charge is calculated on the full transfer value. Transfer a £200,000 pension and face the charge: £50,000 goes to HMRC and £150,000 arrives in your Irish QROPS. There is no threshold below which the charge does not apply — it is 25% of everything.
The Rule That Changed Everything — October 2024
Before 30 October 2024, residents of the European Economic Area — including Ireland — could transfer their UK pension to a QROPS located in any other EEA country without triggering the OTC. This meant an Irish resident could transfer into a Maltese or Gibraltarian QROPS without paying the charge. That exemption is now gone.
What changed on 30 October 2024
Since 30 October 2024, the only way to avoid the OTC is to transfer your UK pension into a QROPS based in the same country where you are tax resident. For Irish residents, this means the transfer must go into an Irish QROPS — not a Maltese, Gibraltarian, or other EEA-based scheme. If your transfer was requested before 30 October 2024 and completed before 30 April 2025, the old EEA rules still applied. That transitional window has now closed.
Does the Charge Apply to Irish Residents?
For most Irish residents transferring a UK pension into an Irish QROPS, the answer is no — the charge does not apply. This is because the residency exemption covers exactly this scenario: you are tax resident in Ireland, and the QROPS receiving the transfer is also based in Ireland. The exemption is met, and the 25% charge is not triggered.
This is the most common situation for people who worked in the UK, moved to Ireland, and now want to bring their pension with them. Provided the Irish scheme is a genuine QROPS — registered with HMRC and appearing on their current recognised schemes list — the transfer proceeds without the charge.
However, the charge will apply if you are not Irish resident at the time of transfer, or if the receiving scheme is not a QROPS. It can also be triggered retrospectively if you move out of Ireland within five years of the transfer.
The Five-Year Monitoring Window
Even if the OTC exemption applies at the time of transfer, HMRC maintains a five-year monitoring window. If you move out of Ireland to a third country within five years of transferring your UK pension into an Irish QROPS, the charge can be applied retrospectively. Equally, if the charge was applied because you were not Irish resident at the time of transfer, and you subsequently move to Ireland within five years, you can apply for a refund.
This is an important consideration for anyone whose residency plans may change — people who might return to the UK, move to a non-EEA country, or are genuinely uncertain about their long-term plans. Transfer and residency decisions need to be considered together, not in isolation.
The Overseas Transfer Allowance
Since the abolition of the UK Lifetime Allowance in April 2024, a new limit applies to QROPS transfers: the Overseas Transfer Allowance (OTA). Set at £1,073,100 for 2025/26, this is the maximum pension value you can transfer to a QROPS without an additional 25% charge applying to the excess. For most people, this will not be relevant. For those with very large pension funds, it is an additional layer of planning that needs to be factored in.
Important information: This article is for guidance only. UK pension transfer rules are complex and subject to change. Always take regulated professional advice before making any decisions. Rules are current as at July 2026. Gen Z Financial Solutions Limited trading as Pension Advice is regulated by the Central Bank of Ireland.