QROPS India Tax: Overseas Transfer Charge Explained

The Overseas Transfer Charge is a UK tax charge of 25% that can apply to certain transfers to QROPS. An India-resident member transferring to an India-based QROPS can generally meet the same-country residence exemption, but the transfer must also be tested against the member’s available Overseas Transfer Allowance and the required information must be provided.

When the charge may not apply

HMRC states that a transfer can be exempt where the member lives in the country in which the QROPS is based. For a returning Indian, this makes the exact date and evidence of Indian residence important. Employer, public-service and international-organisation exceptions can also apply in specific cases.

If the transfer is otherwise exempt but exceeds the member’s available Overseas Transfer Allowance, the excess is generally subject to a 25% charge.

When the full transfer can be exposed

If no exemption applies, the 25% charge can apply to the relevant transferred value. Missing required information can also cause a charge. APSS263 is therefore not a routine form to leave until the end; it is part of the tax-information process.

The five-year change-of-residence risk

A transfer that was initially exempt can become chargeable if the member’s circumstances change during the relevant period. A person who moves away from the country in which the QROPS is established should obtain advice and notify the relevant scheme as required.

Speak to QROPS Direct

If you are considering transferring your UK pension to India, speak to QROPS Direct before taking any action. We can review your pension arrangements, transfer eligibility and the key considerations relevant to your individual circumstances.