Occupational Pensions and the Coming IHT Changes
From 6 April 2027, UK pensions will lose their automatic exclusion from Inheritance Tax, prompting advisers to review legacy planning strategies for internationally mobile clients. Sponsor-linked occupational QROPS established now can help lock in current tax treatment while offering flexible beneficiary arrangements for cross-border families.
The timing matters because transfers made before the IHT change remain outside the estate, preserving a key advantage. For clients with UK pensions planning EU relocation, an occupational structure provides direct death-benefit nominations that bypass probate, combined with Malta's Double Tax Treaty network to simplify payments to heirs in different jurisdictions.
These schemes also benefit from IORP II member protections and scheme growth free of tax (except on Maltese property). Access is available from age 50 for non-UK accumulated funds with up to 30% PCLS, while UK-accumulated funds qualify for 25% PCLS from age 55 (rising to 57 in 2027).
The ITC Occupational Retirement Scheme supports this planning through its sponsor-link framework, enabling OTC-exempt transfers from UK pensions under S244D. MFSA regulation ensures robust governance, making it suitable for clients who want security alongside legacy flexibility.
Advisers should model these options in 2026, considering the five-year relevant period and OTA limits. For families with assets across borders, occupational QROPS represent a proactive step ahead of the IHT deadline.
Contact: queries@itcinternationalpensions.com
Disclaimer: This material is provided for general information only and is intended for financial professionals. It does not constitute legal, tax, investment, or pension advice and should not be relied upon as a substitute for advice tailored to any individual circumstances. Pension transfer treatment depends on the facts of each case, including residence, employment status, scheme rules, and applicable legislation. Professional advice should always be sought before any action is taken.
