Do you have a UK registered pension and are you a tax resident in Hong Kong?

If so, and your pension remains in the UK, you should be aware of your possible UK tax obligations. Furthermore, benefits could be available should you transfer these pension funds out of the UK to other secure jurisdictions under HMRC’s favourable Qualifying Recognised Overseas Pension Scheme (QROPS) regime.

Tax Options

Leave the Pension in the UK

Leave the Pension in the UK

If the pension remains in the UK, and is paid in consideration of past employment or self-employment, UK tax (at up to 45%) would be due on UK pension payments, with no tax payable in Hong Kong. Furthermore, the fund remains exposed to the UK death benefit charges.

Gibraltar QROPS

Transfer to a Gibraltar QROPS

Transferring to a Gibraltar QROPS, for non-UK residents can alleviate UK tax on payments (at up to 45%) with 2.5% Gibraltar tax on payments and generally no tax payable in Hong Kong, even if remitted. Furthermore, the QROPS can protect from the UK death benefit charges if non-UK resident (5 years +) and there is no Gibraltar IHT.

Malta QROPS

Transfer to a Malta QROPS

Transferring to a Maltese QROPS, for non-UK residents can alleviate UK tax on payments (at up to 45%), but Maltese tax at up to 35% is due on such payments under the DTA and generally no tax payable in Hong Kong, even if remitted. Furthermore, the QROPS can protect from the UK death benefit charges if non-UK resident (5 years+) and there is no Maltese IHT.

If you leave your pension in the UK

If you leave your pension in the UK

From 6 April 2006 a single set of rules came into effect. Under this system, the tax treatment for all types of approved schemes, including occupational schemes, small self-administered schemes, personal pensions, self-invested pension plans and retirement annuity contracts have been amalgamated into the rules for Registered Pension Schemes. These can be either Defined Benefit or Defined Contribution (DC) Schemes.

DTA between the UK and Argentina

DTA between the UK and Hong Kong

There is a DTA between the UK and Hong Kong. This provides that pensions and other similar remuneration (including a lump-sum payment) paid in consideration of past employment or self-employment, arising from the UK and paid to residents of Hong Kong, shall be subject to tax only in the UK.

Gibraltar QROPS

Gibraltar QROPS

Gibraltar has no DTA with Hong Kong, therefore the QROPS payments to you would be taxable in Gibraltar, currently at a rate of 2.5%.

No UK income tax if non-UK resident (for 5 tax years + or total withdrawals are below £100,000).

No Gibraltar Inheritance Tax.

Protection from UK IHT.

Protection from UK death benefit charges if non-UK resident (and non-UK resident for the last 5 years + before payment).

Malta QROPS

Malta QROPS

Malta has a DTA with Hong Kong, this provides that pensions and other similar renummeration (including a lump-sum payment) paid in consideration of past employment or self-employment to a resident of Hong Kong shall be taxable only in Hong Kong. However, pension schemes which are recognised for tax purposes in Malta (which QROPS are) shall be taxable only in Malta. Malta taxes such income at rates up to 35%.

No UK income tax if non-UK resident(for 5 tax years + or total withdrawals are below £100,000).

No Maltese Inheritance Tax.

Protection from UK IHT.

Protection from UK death benefit charges if non-UK resident (and non-UK resident for the last 5 years + before payment).

Pension benefits

Pension Death Benefits Payment – UK Tax

From 6 April 2015, the UK tax treatment of benefits from DC schemes on death depends, amongst other things, on the age of the member at the time of death (i.e. pre or post 75). From this date, generally, there should be a lower UK tax cost on passing pension value to heirs on death. However, that said there is still a possible current tax rate of up to 45%.

For those that are non-UK resident and have a QROPS the UK tax cost on succession can be less. 

Make smarter, safer decisions for your pensions.

« View another country
Help me with my pension »
  • “Thank you AES International for helping me and my family with your low cost no-nonsense approach. It is refreshing!”

    AES International Reviews

    Kristian Petersson

  • “With this sort of banking service you also expect to be paying very high fees, but it’s just not the case. I would definitely recommend this to other expatriates, especially those with connections to the UK.”

    Jake van den Dries

    Jake van den Dries

  • “In the short time that I’ve been using AES I’ve made nearly ten thousand pounds and couldn’t be happier!”

    AES International Reviews

    Jackie Pym

International Pension Transfer
How you can benefit from our pension experts:
  • You get the expertise of leading world experts who are UK-authorised
  • Independent analysis to help your decisions
  • Fast service with the best prices
  • Global coverage
  • Integrated investment advice when required

Yes, help me make the most out of my pension »

This general information has been provided on the basis of our understanding of the current legislation in the UK, Gibraltar & Malta as of April 2015. Should any of the information provided be inaccurate, incomplete or misleading, we take no responsibility for any reliance placed on it. We recommend that individuals always seek specialist multi-jurisdictional (where relevant) tax advice so that their individual circumstances can be fully considered.