HM Revenue & Customs is determined not to give up a fight to block in specie pension transfers to SIPPS and QROPS.
Millions of pounds in tax relief claimed against the transfers is in dispute between the providers and HMRC.
The tax man has revealed that despite losing a legal challenge from SIPP provider SIPPChoice, the row is going back to court on appeal.
HMRC banned pension providers from valuing assets transferred into SIPPs and QROPS, such as shares and property.
The tax man claimed the assets were not listed at a true value in many cases, which allowed retirement savers to demand tax relief to which they were not entitled.
Tax man’s arguments rejected
SIPPChoice disagreed with HMRC and took the fight to the First-Tier Tribunal, where the HMRC argument was thrown out.
Now, HMRC has appealed the ruling and is set for a new hearing before the Upper Tribunal.
“SIPPchoice was successful in its appeal to the First Tier Tribunal against HMRC’s denial of tax relief on in-specie contributions to the SIPPchoice Bespoke SIPP,” said a spokesman for SIPPChoice.
“HMRC then applied to the First Tier Tribunal for permission to appeal against the First Tier Tribunal’s decision and were denied permission to appeal. They then applied to the Upper Tier Tribunal for permission to appeal against the First Tier Tribunal decision and on 21 August they were given permission to appeal.
“We now await details of the date of the appeal hearing, at which Sippchoice will be represented.”
Halt on in specie transfers
Meanwhile, SIPP and QROPS providers have stopped accepting in specie transfers. If a retirement saver wants to introduce assets other than cash into a pension, they must first sell them and then contribute any cash raised into the scheme.
Last year, HMRC approached nearly 30 SIPP providers and asked that they repay any tax relief on in specie contributions for the 2012-13 tax year. Relief granted in subsequent tax years is also under dispute, although many firms halted in specie transfers at least two years ago.
One firm, Mattioli Woods, has revealed around £900,000 is set aside to repay tax relief on in specie transfers.
This is incorrect! You don’t get tax relief on an in specie transfer its an in specie contribution! and that is what is being argued about,