Singapore QROPS Investors Win Battle For Court Challenge


QROPS retirement savers battling to stop HM Revenue and Customs (HMRC) snaffling more than half of their pension pots have won permission to challenge the tax man in court.

The investors all transferred UK pensions to the now defunct Singapore ROSIIP QROPS, which lost a lengthy and costly court fight against HMRC, which ruled the scheme failed to meet QROPS rules.

This effectively meant that anyone who had transferred their pensions to the ROSIIP had breached pension rules by making an unauthorised withdrawal from their scheme – which is penalised by a 55% fine plus other penalties.

More than 120 retirement savers who had switched their cash to the ROSIIP are now staging a last-ditch effort to safeguard their pensions by launching an action against HMRC in the High Court.

A judge has cleared their case and the hearing has a three-day slot due to start on June 17, 2013.

Row over ROSIIP

The case swings on whether HMRC should have told the investors that the ROSIIP scheme may have breached QROPS rules.

Lawyers for the group will argue that inclusion on HMRC’s QROPS list should have assured the investors that the tax man had scrutinised the ROSIIP and judged it met the scheme criteria.

HMRC, however, argues that inclusion on the list is by self-certification by the scheme manager who confirms the QROPS meets HMRC’s offshore pension rules.

That means the scheme can be excluded from the list without warning by HMRC. If the scheme is excluded, HMRC then considers the transfer illegal and chargeable to tax and issues an assessment.

In effect, investors are uncertain about the QROPS status of their scheme at any time and could face action to recoup a large slice of their pension fund as fines and penalties by HMRC.

Ready for trial

Robert Waterson, senior associate at Hage Aaronson, the legal firm acting for the ROSIIP group, said: “We are now in full preparation for trial. The act of transferring the pension abroad is a chargeable act unless that transfer is made to a QROPS. HMRC issues a notice of assessment to people who have made a chargeable transfer; it’s the equivalent of a tax bill.”

An assessment typically follows an inquiry, but most of the 37 individuals in the group litigation order did not take part in an inquiry before receiving an assessment, said Mr Waterson.

The Singapore ROSIIP applied for QROPS status in 2006. Most of the retirement savers taking part in the court action transferred their pension into the QROPS in 2007-08, while HMRC excluded the scheme in May 2008.

A subsequent Appeal Court case held the ROSIIP had never qualified as a QROPS, despite telling HMRC the scheme met QROPS rules.

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  1. If these UK pension holders checked the HMRC QROPS list, could see that the scheme was listed, and came to the conclusion it was a QROPS then they have been very hard done by in my opinion.

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