Gibraltar really does tax pension income at 2.5%. The figure is in statute, not in a brochure. What changed on 30 October 2024 is what it costs a British saver to get money there. On UK Budget day that year the government removed the exclusion that let someone resident in the United Kingdom or the European Economic Area transfer into a Gibraltar pension scheme without paying the 25% Overseas Transfer Charge. Parliament then deleted the provision outright. Unless you are tax resident in Gibraltar, or fit one of three narrow employment exclusions, a transfer now costs a quarter of the fund before a penny is invested. So the 2.5% headline survives, and the road to it has narrowed to people who genuinely move here. Below is each half with the statute or the HMRC manual behind it. This is not advice. A pension transfer is close to irreversible and this is a field where bad advice has taken people's retirements, so use this to ask a regulated adviser sharper questions, not to skip one. Section 14B(1) of the [Gibraltar Income Tax Act 2010](https://www.gibraltarlaws.gov.gi/legislations/income-tax-act-2010-2627) taxes income from an approved pension fund at 2.5%. Section 14A does the same job for a fund whose assets were transferred in from a pension scheme in what the Act calls a country of the European Union, and section 14A(5) then defines that phrase to mean the United Kingdom. The rate is statutory rather than a concession, and it has sat there since the Act commenced on 1 January 2011. The approval conditions live in the same sections and are stricter than the sales material suggests. The Commissioner of Income Tax approves a fund only where its rules irrevocably prevent three things: commutation of more than 30% of the value of the fund, any payment of benefits before the normal minimum retirement age of 55 except on ill health grounds evidenced by a registered medical practitioner, and onward transfer to any fund that does not carry equivalent binding rules. That 30% is not a promise of a bigger tax free lump sum. The Act gives the Commissioner power to move the figure up or down having regard to the legislation of the jurisdiction the money came from. We could not establish from published material what percentage is applied in practice to a fund of United Kingdom origin. Ask the trustee, in writing, before you transfer anything, and get the answer from the trustee rather than from whoever is selling the scheme. [The Overseas Transfer Charge arises under section 244AC of the Finance Act 2004](https://www.legislation.gov.uk/ukpga/2004/12/section/244AC), and the amount is 25% of the transferred value. [HMRC's Pensions Tax Manual at PTM102200](https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm102200) lists the conditions that switch it off. There are five. One, the member is resident in the same country as the scheme. Two, the old EEA and Gibraltar route, covered below. Three, the scheme is set up by an international organisation for its own past employees. Four, it is an overseas public service pension scheme and the member is an employee of a participating employer. Five, it is an occupational scheme and the member is an employee of a sponsoring employer. Condition two was the whole Gibraltar retail market. It applied where the scheme was in Gibraltar or the EEA and the member was resident in the UK, the EEA or Gibraltar. HMRC's manual now says it applies only in respect of transfers requested before 30 October 2024 and completed before 30 April 2025. Both of those dates are well in the past. Then Parliament finished the job. [Section 32(1) of the Finance Act 2025](https://www.legislation.gov.uk/ukpga/2025/8/section/32) omits section 244C of the Finance Act 2004 altogether, describing it in the margin as the exclusion from overseas transfer charge where the receiving scheme is in an EEA state or Gibraltar and the member is resident in the UK or an EEA state. [The repealed section](https://www.legislation.gov.uk/ukpga/2004/12/section/244C) now shows on the statute book as omitted. The stated reason is worth quoting because it is unusually candid. The [Government Actuary's Department bulletin on that Budget](https://www.gov.uk/government/publications/autumn-budget-2024-a-gad-technical-bulletin/autumn-budget-2024-gad-technical-bulletin) records that the exclusion went to address the risk of individuals receiving double tax free allowances. In other words, the Treasury believed the attraction was a second tax free lump sum, and closed it. The transfer charge was not the only change in that package. The same GAD bulletin records that the government would bring the conditions for overseas pension schemes and recognised overseas pension schemes established in the EEA into line with those established in the rest of the world from 6 April 2025. Gibraltar lost its shortcut and the schemes themselves lost their lighter conditions, within six months of each other. |Your position|A transfer to a Gibraltar sc