Speculation is growing among financial advisers that India is to be suspended as a Qualifying Recognised Overseas Pension Scheme (QROPS) jurisdiction.
HM Revenue & Customs (HMRC) has rushed out a revised QROPS list within days of the last list with five India QROPS suspended.
A year ago, India was growing as a QROPS jurisdiction with 26 pensions on the HMRC list Since then, 19 India QROPS have been suspended, leaving just seven open to accept transfers from UK pensions.
HMRC has declined to comment on the rumours.
“It’s HMRC policy not to discuss individual financial jurisdictions or QROPS pensions and I’m afraid that’s all I can say,” said a spokesman.
Generally, HMRC publishes a list every two weeks – keeping to a schedule of the first and 15th of each month.
Delisting speculation
This month, three lists have been published – two to the schedule and one dated October 17 which was not released until October 24.
India is not the only QROPS jurisdiction to see pensions missing from the list. Canada has four suspended schemes and Malta has lost two pensions.
Meanwhile, Australia has added five and Barbados one.
HMRC has strict criteria about including overseas schemes in QROPS. They constantly review the schemes that do not meet the criteria and delist them
The latest HMRC list now has only seven India-based pension schemes and many more India based pension schemes are expected to be delisted as they may not meet the criteria stipulated by HMRC.
The first India QROPS opened in November 2006, growing gradually to 27 pensions in October 2013.
QROPS delisting explained
The first warning signs that some India QROPS may have problems meeting HMRC qualifying rules came in July 2014, when 15 schemes were delisted.
Suspension from the QROPS List does not necessarily mean wrongdoing by the provider.
QROPS can be temporarily delisted for administrative reasons or a single member can leave a scheme forcing the QROPS to close.
However, while a scheme is delisted, no UK pension scheme or other QROPS provider can transfer any funds in.
Only a few jurisdictions have lost their QROPS status – including Singapore, Cyprus and Slovakia.
QROPS pensions are regularly suspended and relisted – Hong Kong saw 23 pensions delisted in August 2013, but still has four open.
The next HMRC QROPS List is due for publication on November 1, 2014.
