How to transfer UK pension to France

Dreaming of retiring to France? If you’re starting to plan your move abroad, one of the most important tasks on your to-do list will be to sort your pension.

You might want to transfer your UK pension to France, but is it possible? Find out everything you need to know here in our helpful guide.

We’ll run through the steps involved, which UK pensions are eligible for transfer and how to get started. We’ll also touch on the potential costs and tax implications involved.

And remember, if you’re looking to move pension savings or other income across international borders, the Wise account is an ideal solution. It offers low transfer fees*, the mid-market exchange rate and a choice of 40+ currencies, as well as being safe and secure for transferring large sums.

Can I transfer my UK pension to France?

Unfortunately, you can’t transfer your UK private pension directly to France in the same way as you can to some other countries.¹

How it normally works is that you’ll move your UK pension to a Qualifying Recognised Overseas Pension Scheme (QROPS) in the country you’re moving to.

This would mean that it’s on HMRC’s list of approved QROPS schemes, which are designed to make it easier to move pensions abroad - and help expats avoid high transfer fees and taxes.

The bad news is that France isn’t on HMRC’s QROPS list at all. It’s complicated, but it’s mainly due to incompatibilities between how pensions and trusts work in both the UK and France.²

What does this mean for you? You won’t be able to fill in a form and transfer your pension over to a QROPS in France. If you transfer your UK pension over to another kind of French pension scheme, you could be subject to a whopping 40% tax on it - if your UK pension provider even agrees to make the transfer, that is.¹

However, there are some other options. For example, you might be able to transfer it to an EU QROPS and then have the money paid into your French bank account.

It’s always important to remember that transferring UK-based pensions abroad may have significant tax implications. These can sometimes be complex and costly, depending on the country you’re moving to. This is especially the case if you’re trying to move your pension to France.

So, it’s strongly recommended to speak to a pensions or tax specialist to get some expert advice.

Which UK pensions are eligible for transfer to France?

Not every type of UK pension is eligible for transferring overseas. Whatever country you’re moving to, it’s not possible to transfer your UK state pension abroad.

You can still receive UK state pension payments abroad, but you’ll need to be up-to-date with your National Insurance (NI) contributions and apply to the International Pension Centre within 4 months of your state pension age.³

For UK retirees moving to France, the situation is complicated as it’s not possible to transfer pensions directly via a QROPS.

If you want to transfer a workplace pension, private pension, Small Self-Administered Scheme (SSAS) or defined benefit/contribution scheme pension, it’s recommended to speak to a financial adviser specialising in EU pension transfers.

You’ll also need to check the specific conditions of your pension - as some have restrictions on transfers.

How to transfer your UK pension to France - a step by step guide

Transferring a UK pension to France is not likely to be straightforward. The options available and the process will likely be different for each person, depending on their circumstances.

Qualifying Recognised Overseas Pension Schemes (QROPS)

You’ll have seen the word ‘QROPS’ a lot in this guide, and that’s because the usual way to transfer UK pensions overseas is through a Qualifying Recognised Overseas Pension Scheme.

These are pension schemes that have been vetted and approved by HMRC, and which allow UK nationals to transfer their pensions overseas. Most UK pensions can only be moved to an HMRC-approved QROPS.

This is why France not being on the QROPS list is such a major obstacle.

Steps to transfer your pension

As we’ve mentioned, you’ll need to get tailored advice to find out what the process of transferring your pension overseas will look like.

But here’s a quick look at how it could theoretically work, if you choose to transfer your UK pension to an EU QROPS while you’re living in France:

1. Seek expert advice from an EU pensions or financial advisor.
2. Check that your pension is suitable for overseas transfer - you might find there are restrictions or conditions preventing it. You’ll also need to know about any costs, charges or tax implications.
3. Find an EU QROPS - there is just one listed by HMRC at the moment, the ‘The Pension Scheme Of The Officials Of The European Union’.
4. Set up the transfer with the help of your pensions advisor - there may be forms to fill in and you’ll need all of your pension details to hand.
5. Once the transfer is complete, you can arrange to have your pension paid into a French bank account (or your international Wise account).

When completing the application for your transfer, it’s important to provide all the information you’re asked for promptly.

If you fail to provide all the requested details within 60 days of submitting your form, your transfer will be taxed at 25% - whether or not you’re exempt from other taxes or charges.⁴

Timeframes and costs involved

The time it takes to transfer a UK pension overseas varies. It depends on the processes (and efficiency) of the pension providers involved in both countries, as well as how quickly you respond to requests for information.

You’ll need to speak to your pension provider to find out more about specific timeframes for the transfer to be completed.

In terms of costs, there is one main charge you need to know about. This is the overseas transfer charge of 25%.⁴

If you manage to transfer your pension to an EU QROPS and you’re living within the EU - and stay there for at least 5 years - you shouldn’t have to pay this charge.⁴

However, it may apply if your transfer exceeds your overseas transfer allowance (OTA). This is currently set at £1,073,100, although it can differ in some circumstances. If you exceed your OTA, the 25% charge may be payable on the excess.⁴

Tax considerations of transferring your UK pension to France

The world of tax and pensions is rarely straightforward. It can be extremely complex, especially when trying to navigate tax rules in more than one country. This is why it’s always a good idea to get some professional advice before transferring a pension to another country.

But generally speaking, here’s what you need to know about tax when you move a UK pension to France via an EU-based QROPS.

If you live within the EU at the time of the transfer, you shouldn’t be liable for tax on it. Crucially, you’ll need to stay living in France, the UK or within the EEA for 5 years or you may have to pay 25% tax.⁴

However, there may be other tax implications that affect you, depending on your circumstances. For example:

• If you make a transfer that exceeds your overseas transfer allowance (OTA) of £1,073,100, you’ll pay tax of 25% on the excess.⁴
• If you transfer your pension to a non-QROPS (which is usually not permitted, but still technically possible), you’ll pay up to 40% tax on the whole of the transfer amount.⁴

Save money on pension transfers to France with Wise

After reading this, you should have a better idea of how to transfer your UK pension to France, including the steps, costs and taxes involved.

But it’s also important to think about how you’ll actually receive your pension sum in France. A key consideration is that your pension pot will need to be converted from British pounds (GBP) to euros (EUR).

If you use a local bank account, you could be stung by high currency conversion fees and poor exchange rates. As it’s likely to be a large amount you’re transferring, this could make a serious dent in your retirement funds.

Luckily, there’s a better solution available. Open a Wise account and you can manage your money in 40+ currencies, including GBP and EUR.

You can use it to send and receive money internationally, for low fees* and mid-market exchange rates.

This could be hugely useful for transferring your pension between countries, or even for receiving your UK state pension or other UK-based income while living in France.

Sign up with Wise today

Sources used:

Sources last checked on date: 23-Sep-2024