Qualifying Recognised Overseas Pension Schemes (QROPS) red tape for providers has been tightened up with a new online reporting scheme launched by HM Revenue & Customs.
The online portal for scheme administrators and managers means changes to their QROPS and financial information about pension savers is received quicker by the tax man.
Any potential issues with a scheme or withdrawals and investments by retirement savers are notified earlier through the portal, allowing HMRC to act earlier if they suspect the rules for the overseas pensions are broken.
Although QROPS providers still have the option to send reports on paper, HMRC is urging them to go online as soon as possible.
Secure service
QROPS managers can access the online service to report:
- The QROPS qualifies as a recognised overseas pension scheme
- Notification to HMRC that the scheme continues to qualify as a recognised overseas pension scheme at regular intervals
- Any payments by retirement savers from funds received from a UK pension scheme
- Change of QROPS scheme details
- Information about fund values
- Any information about payments and changes to schemes that were formerly QROPS that hold funds transferred from a UK pension
HMRC hopes scheme managers will report QROPS information as batched reports online rather than on individual forms to cut administration.
HMRC is writing to all QROPS providers about the new online service with security information like reference IDs and authorisation codes needed for registration and log on.
“Although the online service is active, the letters may not get to scheme managers until the New Year,” said an HMRC spokesman. “It’s important no one tries to access the portal until they have the letter of authorisation because of security on the site.”
QROPS reporting
The online service also allows UK pension scheme administrators to tell HMRC about fund or other asset transfers to a QROPS.
The online service is one of several measures HMRC has taken to tighten QROPS rules in recent months.
One flaw highlighted in the current system was that retirement savers and dubious schemes could shift money and change their QROPS status without HMRC receiving notice for some months.
This left HMRC several steps behind chasing rogue schemes and checking QROPS credentials to make sure they were keeping to reporting rules.
Time limits for providing information about reporting financial information on QROPS investors were recently extended from five to 10 years in a bid to curb abuse of the offshore pensions.
