Consumer warnings on the HM Revenue & Customs (HMRC) QROPS List have changed this month.
The latest list published on April 15, 2015, points out that HMRC only lists pensions that scheme administrators have declared meet registered overseas pension scheme (ROPS) rules and that the tax authority cannot guarantee that they are QROPS.
The warning also makes clear that transfers to schemes that are not QROPS may attract a tax charge.
“It is your responsibility to find out if you have to pay tax on any transfer of pension savings,” says the warning.
“HMRC will usually pursue any UK tax charges and interest for late payment arising from transfers to overseas entities that do not meet the ROPS requirements even when they appear on this list. This includes where taxpayers are overseas. HMRC will also charge penalties in appropriate cases.”
Updated guidance
The warning goes on to explain that taking payments from a QROPS before the age of 55 years old will lead to tax penalties except in exceptional circumstances and suggests retirement savers should take professional financial advice before transferring money to or withdrawing cash from a QROPS.
The format of the list has also changed to include the full warning in the header of each page of the QROPS list.
The new warning is much shorter than the single page of A4 that preceded previous lists.
The former warning included information about QROPS that have opted out of public listing and that QROPS on the list had 30 days to inform HMRC about any change of status of the pension.
HMRC approval
Also removed are details about how HMRC would reduce or waive tax penalties for scheme administrators and retirement savers if evidence was available to show any transfer to a QROPS scheme that was not a recognised scheme was made in good faith.
Some QROPS advisers are warning that overseas firms are advertising that schemes on the QROPS LIST are HMRC approved.
However, HMRC explains this is not the case.
“This list is compiled from scheme administrators who have told us they run a pension that qualifies as a QROPS,” said an HMRC spokesman.
“HMRC does not check scheme status and the list should not be viewed as endorsing or approving any pension as a QROPS that meets all the rules laid out in legislation.”
