HMRC has abandoned a case in the High Court against a group of investors in a qualifying recognised overseas pensions scheme (Qrops) who had challenged an earlier decision to delist the scheme and seek charges of up to 55% on their pensions.
HMRC's climb-down over the Singapore Rosiip Qrops scheme came after four days of evidence. The barrister representing HMRC informed the judge that her clients were to immediately withdraw all 'assessments to tax' which had been sent to the investors seeking the charges and that it wished to withdraw completely from the hearing. It was also agreed, unusually, that HMRC would pay all costs on an indemnity basis.
In 2012 HMRC applied a 55% tax charge on members of the Rosiip Qrops after it won a court case establishing that the Singapore scheme had never met the conditions to be a Qrops.
Last year an investor group representing the 120 scheme members launched a judicial review of the tax charge. Law firm Hage Aaronson argued that HMRC's published list of schemes that qualified for Qrops led pensioners to believe they could safely transfer into the scheme.
Justice Charles said HMRC had been overly aggressive in the way it pursued members of the Rosiip Qrops. He also said that he would only accept the application to withdraw on the basis HMRC provides a public statement, effectively a policy statement, setting out its exact position on Qrops.
The judge gave HMRC 21 days to decide whether it would be able to provide such a document and said if it decided it could not, he would not accept the application to withdraw and would make a judgement which he pointed out would be public and which would give his opinion on the case.
The barrister representing HMRC confirmed a high level review was already being conducted into QROPS but that the tax authority is concerned that delivering a policy statement as requested 'may be useful to those who are looking to use QROPS for pension liberation'.
However, the judge said the public were 'entitled to see these points recognised and to see a review published and made public'.
