HMRC has issued a clarification of its policy regarding qualifying recognised overseas pension schemes (Qrops), and is offering an amnesty to schemes set up prior to 2008, potentially saving scheme members a 55% tax charge.
The policy statement is the result of HMRC's defeat in a recent High Court case - Equity Trust Singapore Ltd v HMRC [2012] STC 998 - involving a Singapore-based scheme called Panthera Recognised Overseas Self Invested International Pension (Rosiip).
HMRC originally applied a 55% tax charge on members of the Rosiip Qrops after winning an earlier case establishing that the scheme had never met the conditions to be a Qrops.
An investor group representing the 120 scheme members subsequently applied for a judicial review of the tax charge, arguing that HMRC's published list of schemes that qualified for Qrops led pensioners to believe they could safely transfer into the scheme.
When the case came to court, HMRC threw in the towel after four days of evidence. The judge, who said that HMRC had been 'overly aggressive' in the way it pursued members of the Rosiip Qrop, said he would only accept the application to withdraw on the basis HMRC provides a public statement setting out its exact position on Qrops.
HMRC says it will not pursue assessments of Qrops set up before 24 September 2008, unless there is evidence of artificiality or dishonesty. In its statement, HMRC says that before that date, the Qrops list did not contain any caveat explaining the purpose of the list.
'It might therefore have given the impression that HMRC was satisfied that any scheme that had been included on the list was a Qrops so that there should not be any tax charges in respect of the transfer,' HMRC's statement says.
For transfers made from 24 September 2008 onwards, where a transfer is made to a scheme included on the QROPS list, and HMRC later discovers that the scheme is not a QROPS, HMRC says it will consider whether to exercise its collection and management powers on the particular facts of the case in the light of the principle of 'conspicuous unfairness'.
