Investors with money in defunct Singapore QROPS have won the right to mount a legal challenge against huge tax demands.
Around 60 QROPS investors are fighting claims by HM Revenue & Customs to levy 55% tax charges against the money and assets transferred in to Singapore’s Panthera ROSIIP QROPS.
The ROSSIP was delisted by HMRC in 2008 on the grounds the pension scheme broke rules to meet qualification as a QROPS
Since then Panthera’s parent company Equity Trust has lost a court case disputing the HMRC action.
Under UK tax law, any transfers in to a non-qualifying QROPS are treated as unauthorised pension withdrawals and are subject to a 55% tax penalty.
In April, HMRC started issuing assessments demanding the tax payments from members of the Panthera scheme.
They have a three-month window from the date of issue to challenge the assessment.
Lawyers Dorsey & Whitney are acting for a group of investors to fight the case in court.
Of more than 120 original scheme members, around half have discussed joining the action with lawyers.
The court action is based on a claim that HMRC was wrong to delist the QROPS and cannot raise any tax assessment for three reasons –
- The claim breaches European union laws protecting the flow of capital between EU and non-EU states
- The claims breach human rights laws as “the assessments are being made in circumstances where a taxpayer could not have foreseen that, as a consequence of their actions, they may later be subject to a tax charge or penalty”
- Listing as a QROPS gave investors a legitimate expectation that transfers “would not attract an unauthorised payment charge”
“Under English law, if a taxpayer has acquired a legitimate expectation that he or she was entitled to a particular tax treatment, this also extends to a legitimate expectation that that tax treatment would not be changed retrospectively,” said a spokesman for the lawyers.
A date has not yet been set for a judicial review before a judge, but is expected for next month.
