An influential trade group has criticised HM Revenue & Customs for failing to present a clear policy to retirement savers about Qualifying Recognised Overseas Pension Scheme (QROPS).
The minutes of the latest meeting between HMRC and the Pensions Industry Stakeholder Forum saw members slam the tax authority for failing to match up QROPS legislation with policy objectives.
The group includes representatives from trade bodies like the Association of British Insurers, accounting regulators and actuaries.
In the minutes, HMRC said: “QROPS is a worldwide system; it is widely phrased to make sure every country in the world has the opportunity to enter the system provided that the conditions for doing so are met. At the same time the QROPS regime had to comply with EU law, so not all of the policy intention is reflected in the legislation.”
The group also demanded an explanation about what happens to retirement savers with funds in Guernsey offshore pensions that are no longer allowed to take in pension transfers from the UK.
“Sums that had been transferred to Guernsey schemes when they were QROPS would not be subject to UK tax charges automatically now that the scheme was no longer a QROPS,” said HMRC, with the rider that the original transfer would have had to be within QROPS rules for the waiver to apply.
The forum also discussed a possible loophole over the submission of forms to HMRC for requests made after April 2012, as the current system suggests that a request made before April 2012 about a payment made in the following year will not meet current QROPS rules.
HMRC confirmed they will check the change request to see if this scenario has been considered in the legislation.
HMRC also confirmed an electronic platform is under construction for QROPS providers to make online reports, which should be available in the 2013-14 tax year.