In 2006, following the Finance Act 2004 reforms, I developed one of the first Qualifying Recognised Overseas Pension Schemes from our base in Gibraltar.

The concept was straightforward: if UK pension legislation now permitted transfers to qualifying overseas schemes, there should be properly structured vehicles ready to receive them. What followed was a market that grew rapidly, attracted its share of cowboys, and ultimately matured into a regulated component of international wealth management.

Nearly 20 years on, I find myself making an argument that might seem counterintuitive from someone who built his career on offshore pension innovation. For a significant and growing number of individuals holding QROPS assets, the smartest strategic move is to bring those funds home to a UK Self-Invested Personal Pension (SIPP).

The ground has shifted

The regulatory and tax environment that made QROPS attractive in 2006 bears almost no resemblance to where we are today. Three changes have fundamentally altered the calculus.

First, the abolition of the Lifetime Allowance. For years, one of the strongest arguments for transferring to a QROPS was to escape the LTA charge on funds exceeding £1,073,100. Since April 2024, the LTA has been replaced by the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance, which cap tax-free cash rather than total fund size. For individuals whose primary motivation for going offshore was LTA mitigation, the original rationale has simply evaporated.

Second, the removal of the EEA exemption on 30 October 2024. Previously, transfers between UK pensions and QROPS within the European Economic Area or Gibraltar were exempt from the 25% Overseas Transfer Charge. That exemption has been abolished. Unless you live in the same country where your QROPS is based, a 25% tax charge now applies. This single change has removed the primary advantage of third-party QROPS jurisdictions such as Malta for many European expatriates.

Third, the proposed inclusion of pension funds within the scope of Inheritance Tax from April 2027. The government’s reform will bring unused pension funds and death benefits into the IHT net at 40% where total estates exceed the nil-rate band. This particularly affects those holding QROPS specifically as an IHT mitigation tool.

The cost equation no longer adds up

QROPS typically carry annual administration fees ranging from £800 to over £3,000, before underlying investment and platform charges. With the tax advantages diminished or removed entirely, the fee differential becomes increasingly difficult to defend. Modern UK SIPPs offer transparent, competitive fee structures, regulated by the FCA with recourse to the Financial Services Compensation Scheme and the Financial Ombudsman Service. For bespoke SIPPs, the investment flexibility rivals anything available offshore: commercial property, unquoted shares, multi-currency holdings, and sophisticated drawdown strategies.

Who should be considering repatriation

Not every QROPS holder should transfer back. Individuals permanently resident in the jurisdiction of their QROPS, who benefit from local tax treatment on drawdown, or who have specific currency requirements may be better served by their existing arrangement. However, the profile of the individual for whom repatriation makes compelling sense is broad: British expatriates who have returned or plan to return to the UK, those whose QROPS sits in a jurisdiction different from their country of residence, individuals who transferred primarily to avoid the LTA, and anyone paying substantial annual fees for an offshore wrapper delivering diminishing marginal benefit.

The role of regulated advice

I must be candid about the history of this market. The early years of QROPS attracted unregulated offshore advisers, hidden commissions, and high-risk investment products that caused real harm to members. The repatriation process demands the same vigilance. Any transfer involving safeguarded benefits over £30,000 requires regulated financial advice by law, and even where that threshold is not met, the jurisdictional complexity warrants specialist guidance.

Looking forward

The international pension market I helped create has matured to the point where, for many clients, the simplicity, transparency, and regulatory protection of a UK SIPP now outweighs the bespoke but costly advantages of remaining offshore. That is not a criticism of QROPS as a concept. It is an acknowledgement that the legislative environment which gave them their edge has fundamentally changed.

At UAP Group, we have the unusual advantage of managing both sides of this equation. Through our Guernsey operations we administer QROPS, and through Alltrust we provide UK-regulated bespoke SIPPs and SSAS. That integrated capability allows us to manage the repatriation process end-to-end, ensuring compliance in both jurisdictions without the friction of dealing with unrelated counterparties.

The April 2027 IHT reforms will add further urgency to these decisions. For advisers with clients holding QROPS assets, the conversation about repatriation should not wait. The regulatory changes are not speculative. They are enacted or confirmed. The cost savings are measurable. And the protection offered by bringing assets within the FCA’s perimeter is tangible.

The world has moved on from 2006. The advice we give our clients should move with it.

Rob Shipman is Group CEO at the UAP Group and Director at Alltrust Services