A tax amnesty has been offered to investors in Qualifying Recognised Overseas Pension Schemes (QROPS) set up before September 24, 2008.
The HM Revenue & Customs has pledged not to chase any retirement savers for a 55% tax charge on any QROPS that were suspended before that date – unless evidence of ‘dishonesty or artificiality’ is discovered.
The announcement follows HMRC’s High Court climb down earlier in 2013 when former members of the Singapore QROPS, the Panthera Recognised Overseas Self Invested International Pension (Rosiip), challenged tax assessments handed to them after the Rosiip was suspended.The tax assessments were issued after an earlier High Court ruling judged the Rosiip had never met QROPS rules, which under pension laws, deemed any transfer into the scheme by pension investors an unauthorised withdrawal of funds from their onshore pensions.
HMRC backed down after the pension investors claimed the Rosiip was listed as a QROPS by HMRC, which green lighted pension transfers into the scheme from UK providers.
Overzealous HMRC
Had that not been the case, they argued, the transfers would not have proceeded and the tax assessments would not have been due.
In court, HMRC was branded as overzealous in pursuing the tax assessments and the judge, Justice Charles, demanded a written statement explaining HMRC’s QROPS policy.
The contents of the policy statement have not been revealed, but the amnesty decision is widely seen as HMRC drawing a line under the case.
“Before September 24, 2008, the list did not contain any caveat explaining the purpose of the list. It might therefore have given the impression that HMRC was satisfied that any scheme that had been included on the list was a QROPS so that there should not be any tax charges in respect of the transfer,” said an HMRC spokesman explaining the amnesty.
QROPS list
HMRC also said retirement savers considering transferring pension funds from the UK into a QROPS should take independent, professional advice before committing any funds.
Although the statement does not explicitly mention the Singapore Rosiip QROPS, prior to September 24, 2008, no other financial jurisdiction was suspended from the QROPS list.
Singapore has not listed a QROPS since the Panthera Rosiip was suspended.
HMRC publishes a list of active QROPS schemes once every two weeks. Caveats on the list explain that no QROPS on the list is ‘approved’ by HMRC, but inclusion is merely an indication that the scheme trustees have notified HMRC that their scheme meets QROPS rules.
The next list is due on December 1, 2013.
