HM Revenue and Customs is refusing to comment on why 23 Hong Kong Qualifying Recognised Overseas Pension Schemes (QROPS) no longer appear on the official QROPS list.
Instead, media inquiries are deflected to an online manual for tax inspectors that discusses the QROPS list.
However, the manual is written by HMRC as guidance for tax inspectors and has no force in law. The contents are merely HMRC’s interpretation of the law and open to testing before tax tribunals and the courts.
The recent Singapore ROSIIP QROPS debacle in the High Court shows HMRC’s interpretation of the law is an opinion and not always right.
In that case, the High Court in London eventually ruled after years of wrangling that the scheme had never qualified as a QROPS.
Flawed HMRC guidance
According to the manual, that allows HMRC to tax any transfer as an unauthorised withdrawal from a pension fund. However, HMRC changed its mind and rushed to withdraw from the case.
So, either the case against the Singapore ROSIIP based on the HMRC manual guidance is flawed or it’s not.
No one knows because HMRC’s lawyers are fighting to keep a policy statement on QROPS ordered by the judge confidential.
If the manual is incorrect, then HMRC is wrong in pointing inquiries towards the contents.
Much is said about the public’s right to know. In the case of QROPS that are delisted, HMRC refuses to release any information about the scheme unless the scheme managers give written permission.
This is a recipe for disaster, as investors with tens of thousands of pounds of pension cash tied up in a QROPS deserve to know what is happening with their money if a QROPS is delisted.
No QROPS consumer protection
HMRC is hypocritical here – regulators like the The Pensions Regulator and the Financial Conduct Authority (FCA), which regulate UK pension firms and advisers, name and shame companies accused of shady dealings almost daily.
Even the police release ‘most wanted’ photos and information about crooks on the run.
In recent cases, the FCA has urged investors and financial advisers to avoid sending cash to some firms, like the recent Harlequin Properties warning.
HMRC needs to understand that as a government agency, the organisation should act as a consumer protector as well as a tax collector.
If HMRC is privy to important information that a retirement saver with a QROPS needs to know, then that information should be shared without reference to the scheme administrator.
HMRC is not a protector of a QROPS business, but a protector of the public which it serves.
