Can you keep your UK SIPP or workplace pension after making aliyah?
Yes, almost always. Moving to Israel does not force you to close, cash out, or transfer your UK self-invested personal pension (SIPP), workplace pension, or personal pension. The scheme keeps running, your investments stay invested, and you draw from it later from Israel. The question that actually matters for an oleh is not can I keep it but who taxes it once I live in Israel, and that answer comes from the UK-Israel tax treaty, not from the pension provider. This is the cross-border layer a lifelong Israeli with an Israeli pension never has to think about, and it is exactly where new olim from the UK get bad advice from QROPS salespeople.
Not advice
How does the UK-Israel treaty tax a private UK pension once you live in Israel?
Under the UK-Israel treaty, a private (non-government) pension paid to a resident of Israel is taxable only in Israel. The 1962 UK-Israel Double Taxation Convention, as amended by the 1970 and 2019 Protocols, provides that pensions and other similar remuneration paid to a resident of one territory are taxable only in that territory.4 So once you are an Israeli tax resident, the UK gives up its taxing right over your SIPP or workplace-pension income, and Israel becomes the country that taxes it, at least in principle.5
This is reinforced by the basic UK non-residence rule: once you are non-UK-resident under the Statutory Residence Test, you pay UK tax only on UK income, and HMRC applies the treaty to decide what counts.3 The practical upshot for most UK olim is that, after a clean break in residence, the pension provider should pay your pension without deducting UK tax once HMRC issues an NT (no-tax) code under the treaty, a step you generally have to claim, not one that happens automatically.4
One big exception: government pensions
How does the oleh 10-year exemption change the Israeli side?
For a new oleh, the income the treaty hands to Israel is then exempt from Israeli tax for ten years. A new immigrant gets a 10-year exemption from Israeli tax on foreign-source income from the aliyah date, and a UK pension is foreign-source income.6 Combine the two rules and you get the headline result: a private UK pension drawn by a new oleh is taxable only in Israel under the treaty, and then Israel-exempt for the first ten years. For that window, the pension can be effectively untaxed on both sides, which is precisely why transferring it away is so rarely worth it.
The 1 January 2026 reporting change
Hold the three layers separately, because collapsing them is where olim make expensive mistakes:
| Layer | What it decides | Result for a new UK oleh's private pension |
|---|---|---|
| UK domestic rule | Whether the UK can tax a non-resident | Non-residents pay UK tax only on UK income; HMRC then applies the treaty |
| UK-Israel treaty | Which country gets the taxing right | Private pension taxable only in Israel; government pension stays UK-taxable |
| Israeli oleh rule | Whether Israel actually charges tax | Exempt for 10 years from aliyah (but reportable from 1 Jan 2026) |
What is QROPS, and why is transferring out usually the wrong move?
A QROPS (Qualifying Recognised Overseas Pension Scheme) is a non-UK pension you can transfer a UK pension into, and for an Israel-resident oleh it usually creates cost and risk without a matching benefit. The hard number is the Overseas Transfer Charge: a transfer to a QROPS is charged at 25% of the transferred value unless a specific exemption applies.2The exemptions are narrow (broadly, the member is resident in the same country where the QROPS is established, or it is an occupational scheme of the member's sponsoring employer), and Israel has historically not had a useful list of QROPS schemes for an ordinary oleh to land in.2
Stack that against what you would be giving up. The pension you already hold is, for a new oleh, taxable only in Israel under the treaty and Israel-exempt for ten years; it stays invested, regulated, and accessible from Israel without moving anything. A QROPS transfer risks the 25% charge, can replace a low-cost SIPP with a higher-fee offshore wrapper, and often comes packaged by a commission-driven adviser. For the typical UK oleh, the correct default is blunt: do not transfer. Keep the pension where it is.
What happens to the 25% tax-free lump sum once you are non-UK-resident?
The 25% tax-free lump sum is a UK rule, and crossing the border to Israel does not make it an Israeli rule. In the UK you can usually take up to 25% of your pension as a tax-free lump sum, capped at a Lump Sum Allowance of GBP 268,275.1But that "tax-free" status is a feature of UK pension law, not a treaty guarantee. Israel does not have a mirroring 25%-tax-free-lump-sum concept, so how a lump sum is treated in Israel depends on Israeli rules and your oleh status, not on the UK label.
For a new oleh inside the 10-year window, foreign-source pension income (including a lump sum drawn from a UK pension) generally falls within the foreign-income exemption.6 The trap is timing: take a large lump sum after the ten years end and you can no longer lean on the oleh exemption, and the treaty assigns the income to Israel, so a sum the UK would have let you take tax-free is now exposed to ordinary Israeli rules. If a tax-free lump sum is part of your plan, the question is not just how much but when relative to your aliyah clock.
A worked example: David's SIPP
Does PFIC apply to a UK pension if you are a UK-US dual citizen?
Usually not to the pension wrapper itself, but it is a live risk you must check, and it is a reason a pure UK-side analysis can mislead a dual citizen. The US taxes its citizens on worldwide income for life, so a UK-US dual oleh is inside the US system no matter where they live. A UK pension held in a recognised UK scheme is frequently shielded by the US-UK treaty from being taxed as you grow it, but a SIPP that holds non-US pooled funds (UK or Israeli ETFs, OEICs, unit trusts) sits near the PFIC line: under US rules each non-US pooled fund is a Passive Foreign Investment Company, reported on Form 8621, and the default method can tax gains punitively.7 Whether the pension wrapper protects those holdings is a fact-specific, US-treaty question that a UK-only adviser will not answer. If you hold a UK or US passport, do not transfer or restructure your SIPP without a US-side review.
UK-only olim: this part is not your warning
Knowledge Check
A new UK oleh keeps their private SIPP and draws income in year 3 after aliyah. Who taxes that income?
You can almost always keep your UK SIPP or workplace pension after aliyah. The provider does not force you to move or cash it out just because you now live in Israel. The question that matters is who taxes it: under the UK-Israel treaty, a private (non-government) UK pension paid to an Israeli resident is taxable only in Israel, and the oleh 10-year exemption can then make that foreign-source income Israel-exempt too. A UK government or public-service pension (civil service, NHS, teachers, armed forces, police) is the exception and usually stays UK-taxable. Transferring out to a QROPS can trigger a 25% Overseas Transfer Charge and rarely helps an ordinary Israel-resident oleh, so the default is to leave the pension where it is. The UK 25% tax-free lump sum (capped at GBP 268,275) is a UK rule that Israel does not mirror, so the timing of a lump sum relative to your aliyah clock matters. This is general educational information, not tax, legal, or financial advice.
No. There is no requirement to transfer or close a UK SIPP, workplace pension, or personal pension when you become an Israeli resident. You can leave it with your UK provider, keep it invested, and draw from it later from Israel. For most UK olim, leaving it in place is the right default; transferring it out is the move that needs justifying, not keeping it.
For a private pension, generally no. Once you are non-UK-resident and the UK-Israel treaty applies, a private UK pension is taxable only in Israel, and you can ask HMRC for an NT (no-tax) code so the provider stops deducting UK tax. This is a step you generally have to claim, not one that happens automatically. A UK government or public-service pension is the exception and usually remains UK-taxable, so check which type you have.
A new immigrant gets a 10-year exemption from Israeli tax on foreign-source income from the aliyah date, and a UK pension is foreign-source income. Combined with the treaty, a private UK pension drawn by a new oleh is taxable only in Israel and then Israel-exempt for the first ten years, so it can be effectively untaxed on both sides during that window. Note that from 1 January 2026, olim who become Israeli residents on or after that date still get the exemption but must report the income to the Israel Tax Authority on their annual return. It is report-but-exempt, not invisible.
The 25% tax-free status is a UK rule, capped at a Lump Sum Allowance of GBP 268,275, and it does not automatically carry into Israel. Israel does not have a mirroring 25%-tax-free-lump-sum concept. For a new oleh inside the 10-year window, foreign-source pension income generally falls within the oleh exemption. After ten years the exemption ends and the treaty assigns the income to Israel, so the timing of a large lump sum relative to your aliyah date matters a lot.
Rarely, for an ordinary Israel-resident oleh. A transfer to a QROPS can attract a 25% Overseas Transfer Charge on the transferred value unless a narrow exemption applies, and it often swaps a low-cost, well-regulated UK pension for a higher-fee offshore wrapper sold on commission. There are edge cases, but the burden of proof is on the transfer. If someone is pushing one, treat keeping it where it is as the baseline and make them beat it.
Yes. You remain inside the US tax system on worldwide income for life, your UK SIPP is reported on your US return, and if it holds non-US pooled funds (such as UK or Israeli ETFs, OEICs, or unit trusts) the PFIC regime reported on Form 8621 can apply, with gains taxed punitively under the default method. The clean UK-Israel treaty answer is not the whole picture for you, so get a US-side cross-border review before drawing, transferring, or restructuring the pension.
The UK State Pension is a separate question from your SIPP or workplace pension and is handled by HMRC and the DWP under their own rules and the treaty's government and social-security provisions. This article covers private and workplace pensions; confirm State Pension treatment and any uprating-while-abroad rules separately before relying on it.
