The countdown has started for HM Revenue and Customs to issue a clear and unambiguous statement explaining QROPS (Qualifying Recognised Overseas Pension Scheme) rules for investors.
A High Court judge has given just 21 days to lay out in writing what HMRC has failed to manage in over seven years.
QROPS were introduced on April 6, 2006 – and the rules have been chopped and change with amendments and revisions several times since.
Now, the courts have said enough is enough.
A group of Singapore ROSIIP QROPS investors went to the High Court to challenge HMRC’s decision to exclude the scheme in 2008.
For the retirement savers, exclusion meant the funds transferred into the ROSIIP were subject to a minimum 55% penalty charge – and for some extra fines and penalties adding up to 75% of the fund value.
After four days arguing the case in the High Court, HMRC ran up the white flag.
Humiliated and beaten before the judge delivered a verdict, HMRC’s lawyers withdrew all action against the investors, asked to withdraw from the hearing and offered to pay all the costs of the case.
The clearly vexed judge heaped to insult on injury by telling HMRC that they could only withdraw from the case if a public statement laying out the official position on QROPS.
If not, HMRC will not have position to withdraw from the case and the judge will make a ruling.
For the investors, the road to the High Court has followed a controversial route.
July 21, 2013 – key QROPS date
After the QROPS was delisted, the ROSIIP trustees took the case went before the court twice –
- May 2011 – The High Court ruled the Singapore scheme was never a QROPS
- March 2012 – The Court of Appeal upheld the earlier ruling
HMRC’s lawyers explained a ‘high-level’ QROPS review was already underway, but expressed concerns that information in any public statement could give pension liberation schemes an insight into action underway to thwart them.
From HMRC’s point of view, the capitulation in the court without a statement or judge’s ruling leaves QROPS legislation as is.