Where you retire matters enormously for how much of your UK pension income you actually keep. The difference in net pension income between two expats with identical UK pension arrangements — one in Cyprus, one in Spain — can easily run to tens of thousands of pounds per year, simply as a result of the double taxation agreement (DTA) and domestic tax rules of the respective countries.
This guide provides a practical overview of pension planning considerations across a range of popular destinations for internationally mobile UK nationals. These are not exhaustive tax analyses — every individual's position depends on personal circumstances and requires qualified professional advice. They are, however, a starting point for understanding what is possible.
Cyprus
DTA position: The UK-Cyprus Double Taxation Agreement provides that pension income from UK-registered pension schemes is taxable in Cyprus rather than the UK. Cyprus tax residents can elect annually for a flat rate of 5% on foreign pension income exceeding an exempt threshold. Under the Cyprus 2026 tax reform that threshold rose from €3,420 to €5,000 with effect from 1 January 2026, so the first €5,000 of foreign pension income is tax-free and the 5% rate applies above that. Residents may instead elect to be taxed under the normal progressive rates if that is more favourable. The precise position should be confirmed with a Cypriot tax specialist.
Non-dom regime: Cyprus offers a 60-day non-dom rule for those who are resident in Cyprus but not domiciled there — this provides significant additional tax benefits on income outside Cyprus.
QROPS: Approved QROPS schemes exist in Cyprus. Since the EEA/Gibraltar exemption from the Overseas Transfer Charge was abolished on 30 October 2024, the OTC-free route now depends on transferring to a QROPS established in the same country in which you are resident — for a Cyprus resident, a Cyprus-based QROPS avoids the 25% charge, whereas a Malta QROPS would now trigger it. A QROPS with the pension subject to Cypriot taxation at 5% can be substantially more efficient than keeping the pension in a UK SIPP — but the jurisdiction must be chosen carefully to avoid the OTC.
State Pension: Cyprus has a bilateral social security agreement with the UK — the State Pension is uprated annually for UK nationals resident in Cyprus.
IHT: Cyprus has no inheritance tax. Pension death benefits passing to Cypriot-resident beneficiaries face no Cypriot inheritance tax.
Overall verdict: Cyprus is consistently rated among the most pension-efficient destinations for UK expats. The 5% DTA rate, non-dom benefits, State Pension uprating, and absence of inheritance tax make it a compelling combination.
UAE / Dubai
DTA position: There is no comprehensive personal income Double Taxation Agreement between the UK and UAE. The UAE-UK DTA covers companies and some income, but does not include a comprehensive article on personal pension income.
UAE local tax: The UAE has no personal income tax. Dubai residents pay no income tax on any source of income within the UAE.
UK tax position: Because there is no DTA override, UK-source pension income (SIPP drawdown) from a UK-registered scheme remains technically subject to UK income tax. The practical position depends on your UK residence status under the Statutory Residence Test:
- If you are non-UK resident under the SRT and have been so for sufficient time, pension income paid from a UK scheme may be exempt from UK income tax under ITEPA 2003 provisions (specifically S573 ITEPA) — but this analysis is complex and requires specialist UK tax advice.
- In practice, many UAE-based UK expats claim that UK pension income is not subject to UK tax after establishing non-residency; however, HMRC's published guidance and the absence of a DTA means this position is not as clear-cut as in Cyprus or Greece.
QROPS: There is no UAE-specific QROPS jurisdiction. International QROPS (Guernsey, Isle of Man) may be used, but since UAE is not EEA, the Overseas Transfer Charge (25%) applies unless the QROPS is specifically structured for UAE-resident members. Careful advice is required.
State Pension: UAE is a frozen pension country. Your State Pension will not increase once you start claiming it in the UAE.
Overall verdict: The UAE is highly attractive for many UK expats from a broader tax perspective (no local income tax, no UAE IHT, no UAE CGT), but the pension-specific position is less clear than Cyprus. Seek specific UK tax advice on the pension income position before commencing drawdown.
Spain
DTA position: The UK-Spain DTA (2013 Convention) provides that UK private pension income — from employment or personal pensions — is taxable in Spain at Spanish domestic rates. Spanish rates are progressive:
| Spanish Taxable Income | Rate (2025, indicative) |
|---|---|
| Up to €12,450 | 19% |
| €12,450 – €20,200 | 24% |
| €20,200 – €35,200 | 30% |
| €35,200 – €60,000 | 37% |
| €60,000 – €300,000 | 45% |
| Over €300,000 | 47% |
The UK State Pension is taxable in the UK under the DTA (as government-source income), not Spain.
State Pension: Spain has a bilateral agreement with the UK — the State Pension is uprated for qualifying UK nationals in Spain.
QROPS: Spain is generally not recommended as a QROPS destination. While Guernsey and Gibraltar QROPS are sometimes used for Spanish residents, the pension income would still be taxed in Spain at Spanish rates. Gibraltar QROPS have been used for British expats in Spain post-Brexit, providing some structural benefits, but the tax saving is limited by Spanish rates applying to the income regardless.
Non-lucrative visa: UK nationals wanting to retire in Spain typically require a non-lucrative visa. This requires demonstrating income of approximately €27,000+/year (from all sources including pension), comprehensive health insurance, and no requirement to work in Spain.
Overall verdict: Spain is not a pension-efficient destination for UK nationals with large pension pots. Progressive Spanish rates up to 47% on pension income can significantly erode drawdown income. Pension structuring advice is particularly important before relocating to Spain.
Thailand
DTA position: The UK-Thailand DTA provides that UK-source pension income (from UK employment) is taxable in the UK. Thai tax applies only to income arising in Thailand. A UK national living in Thailand and drawing a UK pension pays UK income tax on that pension — the same as if they were still living in the UK (subject to UK personal allowances).
Thai tax on pensions: Thai domestic law taxes foreign-source income remitted to Thailand in the same calendar year it is earned. In practice, many UK expats in Thailand plan pension remittances carefully to minimise Thai exposure, though the DTA position means UK pension income is primarily a UK tax matter.
State Pension: Thailand is a frozen pension country. The State Pension is frozen at the rate first claimed and receives no annual increases.
QROPS: Thailand is not EEA — a Malta QROPS would trigger the 25% OTC. There is no Thailand-specific QROPS. For most UK expats in Thailand, a UK SIPP is the practical holding arrangement, with drawdown timed to use UK personal allowances efficiently.
Cost of living consideration: Thailand's relatively lower cost of living means that even modest pension income can provide a comfortable lifestyle. Many UK expats in Thailand draw only the personal allowance (£12,570 in 2025/26) annually from UK pensions — entirely tax-free — and supplement with other income.
Overall verdict: Thailand offers lifestyle rather than pension tax advantages. The frozen State Pension and absence of QROPS options mean pension planning in Thailand focuses on maximising State Pension entitlement before departure, using UK personal allowances, and keeping UK pension administration simple.
Greece
DTA position and non-dom regime: Greece introduced one of Europe's most competitive pensioner tax regimes under Article 5B of the Greek Income Tax Code. Qualifying new Greek tax-resident pensioners — those who were not Greek tax resident in five of the previous six tax years, and who relocate from a country with a tax co-operation agreement with Greece — can elect for a flat rate of 7% on all foreign-source income, including UK pension income.
Key features:
- The 7% flat rate applies for up to 15 tax years
- The regime covers all foreign-source income — not just pensions — including investment income, rental income from abroad, and capital gains on foreign assets
- The 7% tax is payable as a single annual lump sum
- Application is made to the Greek Tax Office (AADE) with documentation of prior non-residency
State Pension: Greece has a bilateral agreement with the UK — the State Pension is uprated for qualifying UK nationals.
IHT in Greece: Greece has inheritance tax on Greek-situs assets but the pension death benefit position requires specific advice.
QROPS: The EEA exemption from the Overseas Transfer Charge was abolished on 30 October 2024, so a Malta QROPS would now trigger the 25% OTC for a Greek resident (different country of residence). To avoid the charge, a QROPS established in Greece itself would be required. Where an OTC-free structure can be arranged and pension income is taxed at 7% in Greece under the Article 5B regime (rather than UK income tax rates), the result can be very tax-efficient — but the OTC position must be confirmed before transferring.
Overall verdict: Greece's Article 5B pensioner regime makes it one of the most attractive destinations in Europe for UK expats with large pension pots. Combined with State Pension uprating and the low 7% flat rate on foreign income, the pension planning potential is excellent — though any QROPS transfer now needs careful Overseas Transfer Charge planning following the abolition of the EEA exemption in October 2024.
Egypt
DTA position: There is a UK-Egypt DTA, though it is an older agreement. The pension article should be reviewed with an Egyptian tax specialist.
State Pension: Egypt is a frozen pension country. The State Pension does not increase for UK nationals resident in Egypt.
Local tax: Egypt applies income tax on a progressive basis. Foreign-source income tax treatment for non-Egyptian nationals should be confirmed with local advisers.
QROPS: Egypt is not EEA. Malta QROPS would trigger the OTC. Pension arrangements for UK expats in Egypt are relatively limited and typically involve maintaining UK SIPP structures with careful drawdown planning.
Overall verdict: Egypt is not a pension-tax-efficient destination for UK nationals compared to Cyprus, Greece, or Malta. Pension planning there focuses primarily on State Pension maximisation before departure and SIPP management for private pensions.
Bali / Indonesia
DTA position: There is no Double Taxation Agreement between the UK and Indonesia that comprehensively covers personal pension income. UK pension income drawn by a UK national in Indonesia is technically subject to UK income tax as UK-source income.
Indonesian tax: Indonesia applies progressive personal income tax rates. Foreign nationals resident in Indonesia for 183+ days in a year are tax resident and potentially liable on worldwide income, though in practice enforcement on UK-source pension income for short-term residents is limited.
State Pension: Indonesia is a frozen pension country. The State Pension is frozen at the rate first claimed.
QROPS: No Indonesia-specific QROPS. OTC would apply to Malta QROPS. UK SIPP is the standard arrangement.
Retirement visa: Indonesia's retirement visa (KITAS) is available to those aged 55+ with evidence of income, including pension income — typically a minimum of USD 1,500/month.
Overall verdict: Bali/Indonesia is a lifestyle destination. Pension tax planning is more limited than Cyprus or Greece. Maximise State Pension entitlement and structure UK SIPP drawdown efficiently before relocating.
Market Comparison Summary
| Market | State Pension | UK Pension Tax | QROPS Option | IHT | Rating for Pension Planning |
|---|---|---|---|---|---|
| Cyprus | Uprated | 5% flat rate | Yes (same-country QROPS to avoid OTC) | No IHT | Excellent |
| Greece | Uprated | 7% (pensioner regime) | Yes (same-country QROPS to avoid OTC) | Limited | Excellent |
| UAE | Frozen | UK rate (no DTA) | Possible (complex) | None | Good (with planning) |
| Spain | Uprated | Spanish rates (up to 47%) | Limited | Yes | Challenging |
| Thailand | Frozen | UK rate | Limited | None | Moderate |
| Egypt | Frozen | UK rate | Limited | Yes | Limited |
| Bali | Frozen | UK rate | Limited | Yes | Limited |
How Global Investments Can Help
Our team has deep expertise in pension planning for internationally mobile clients across major destinations worldwide. We understand how the interaction of UK pension rules, local tax regimes, DTAs, and QROPS structures plays out in practice — not just in theory.
We can help you:
- Understand the pension tax position specific to your destination country
- Model the net income comparison under SIPP vs QROPS for your situation
- Connect with regulated local and UK pension advisers in your destination country
- Coordinate pension planning with international property investment
- Integrate pension planning with international estate and succession planning
Visit /uk-pensions/ for all our pension guides, or contact our team to discuss your specific situation. Tax rules vary by country and individual circumstances; always seek qualified professional advice in both the UK and your country of residence. Rules and rates are subject to change as of 2026.
Frequently Asked Questions
Which country offers the best tax treatment for UK pension income?
Cyprus and Greece offer the most favourable tax treatment for UK pension income among common expat destinations. Cyprus applies a 5% flat rate under the UK-Cyprus DTA. Greece's non-dom regime imposes a 7% flat rate on all foreign income for qualifying new residents for 15 years.
Is UK pension income taxed in the UAE?
The UAE has no income tax, but this does not automatically mean your UK pension income is tax-free. There is no comprehensive personal income DTA between the UK and UAE. UK-source pension income may remain subject to UK income tax depending on your UK residence status and how long you have been non-resident.
Can I get a QROPS in Thailand?
There is no QROPS specifically for Thailand. Since the EEA exemption was abolished in October 2024, transferring to a Malta QROPS would trigger the 25% Overseas Transfer Charge for a Thailand-resident member. The State Pension is frozen in Thailand. For most UK expats in Thailand, maintaining a UK SIPP is the most practical arrangement.
What is the Greek non-dom pension tax regime?
Under Article 5B of the Greek Income Tax Code, qualifying new tax-resident foreign pensioners can elect for a 7% flat rate on all foreign-source income — including UK pension income — for a period of 15 years. This is one of the most attractive pension income regimes in Europe for UK expats.
Does the UK-Spain double taxation agreement help with pension income?
Under the UK-Spain DTA, UK private pension income (from occupational or personal pensions) is generally taxable in Spain at Spanish rates — which can reach 47% at the top. The UK State Pension is taxable in the UK under the treaty. Spain is generally not a tax-efficient jurisdiction for large UK pension drawdowns.
This guide is for general information only and does not constitute financial, legal or tax advice. Pension rules, tax rates and programme details change; verify current requirements with a qualified and FCA-regulated pensions adviser before acting. Pension transfers involving defined benefits over £30,000 require regulated advice.