Lawyers for HMRC have lodged the long-anticipated QROPS policy document with the High Court – but refuse to make the contents public.
Apparently the papers were filed late on Friday, July 12, 2013, to avoid missing the deadline set by the judge at the Singapore ROSIIP QROPS hearing in June.
HMRC has also made an application to withdraw the case in line with statements made to the court by lawyers in June.
HMRC explained the judge had been provided with the statement he had requested, but a decision whether to make the details public or not was left for him to make.
The tax man seems to be playing a game of brinksmanship by complying with directions but taking the issue no further without a shove from the judge.
The policy statement was demanded by the court when HMRC asked to withdraw from the Singapore ROSIIP QROPS case brought by more than 100 disgruntled investors.
After a court battle lasting several years, the ROSIIP was found not to meet QROPS rules. As a result, HMRC served tax assessments on the investors on the grounds their pension transfers from the UK into the fund were unauthorised pension withdrawals.
The investors argued that HMRC suspected the Singapore QROPS broke the rules long before excluding the pension from the scheme – and had the investors known this they would not have transferred their funds.
Because of this, they claimed, the tax assessments demanding between 55% and 75% of the pension transfer values.
They also argued HMRC had failed to use discretion not to tax them when investors in a Hong Kong QROPS that was excluded were not penalised.
Clear QROPS policy needed
After three days in the High Court arguing the points, HMRC’s lawyers withdrew the tax assessments and requested the judge allowed them to withdraw from the case. He ordered that the application could only proceed if HMRC made a policy statement about taxing investors with cash in excluded pension schemes.
QROPS commentators are speculating on the contents of the statement and suggest HMRC is ready to implement tougher monitoring of pensions included on their QROPS list.
Many want the HMRC statement made public to clarify the status of the Qualifying Recognised Overseas Pension Scheme list and to set clear guidelines on the tax status of investors when a QROPS is excluded from the list.
It’s likely HMRC is hoping this will not happen, as they prefer to deal with taxpayers on a case-by-case basis rather than setting clear black-and-white rules to follow.
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