QROPS Spain

Transferring a UK Pension to Europe as a Resident in Spain

Residents in Europe have the option of transferring a UK pension scheme to a Qualifying Recognised Overseas Pension Scheme (QROPS) in Malta.

Malta is a country in the European Union and a member of the European Economic Area.

A QROPS in Malta is a regulated pension scheme and retirement benefits can be received anywhere throughout the European Economic Area (EEA).

Moving to Spain | UK Pension Transfers to a Pension Scheme in Europe

If you are moving to Spain, it is possible to transfer private pension schemes in the UK to Europe by setting up a QROPS in Malta.

It is possible to set up a QROPS in euros rather than pounds sterling.

Transferring a Pension to Europe

You may want to move some or all of your pension fund (sometimes called a ‘pension pot’) if:

you’re changing job
your pension scheme is being closed or wound up
you want to transfer to a better pension scheme
you have pensions from more than one employer and want to bring them together
you’re moving overseas and want to move your pension to a scheme in that country

source: https://www.gov.uk/

Tax on a Malta QROPS for Residents in Spain

No tax at source in Malta if resident in the European Economic Area
There is a double taxation agreement between Spain and Malta
Local taxes in Spain apply

Tax on Transfer

There is no tax on transfer under current rules.

However, there is an Overseas Tax Charge (OTC) which can apply if you leave the European Economic Area (EEA) within five years of transferring your pension scheme.

How to Transfer a UK Pension to a QROPS

A financial adviser can provide you with the necessary forms to begin the process. An adviser will guide you through the process and make recommendations based on your circumstances.

Please contact us for more information.

Which UK Pensions Are Taxed in Spain?

If you are tax resident in Spain, your UK state pension and any occupational pension income will be taxable only in Spain and not in the UK, under the terms of the UK-Spain Double Taxation Treaty.

UK Government service funded pensions (for example, civil service, local government schemes, fire service, police and most teachers) remain liable only to UK tax and are not taxable in Spain.

Funded public sector schemes can be transferred to a QROPS.

Unfunded public sector schemes (e.g. NHS, civil service, teachers and armed forces) cannot be transferred to a QROPS.

Income Tax in Spain (2019)

Savings taxable income is taxed at the following rates:

19% for the first EUR 6,000 of taxable income.
21% for the following EUR 6,000 to EUR 50,000 of taxable income.
23% for any amounts over EUR 50,000.

For general taxable income, progressive tax rates are applied (which are the sum of the applicable rate approved by the state and the applicable rate approved by each autonomous community of Spain in their progressive tax rate scales). Tax liability may therefore differ from one autonomous community to another.

The following tables show the tax scale for withholdings approved by the state. This scale can be used as a guideline of the progressive tax rates applicable for the general taxable base. For the reasons stated above, the scale applicable in the corresponding autonomous community of Spain should always be consulted to calculate the total progressive tax rate.

Tax scale for withholdings applicable in 2019:

i) General Income:

Rate Bands	Income Tax Rate in 2019
Rate Bands	Income Tax Rate in 2019
EUR	%
0 – 12,450	19%
12,450 – 20,200	24%
20,200 – 35,200	30%
35,200 – 60,000	37%
60,000+	45%

These rates apply to general taxable income. Different rates may apply depending on the region (“Comunidad Autónoma”) where the taxpayer is resident and will be applied on the taxpayer’s annual income tax return.