There has been an update in the long running ROSIIP issue with HM Revenue & Customs releasing new guidance following the long-running case.
The ROSIIP case dates back to 2008 when the UK authorities withdrew QROPS status from the Singapore based scheme. After a hearing at the High Court it was ruled that ROSIIP never met the requirements to be categorised as a QROP Scheme. This left those in the scheme possibly facing a 55% tax charge. This is not now judged to be the case.
HMRC later withdrew from the case and agreed to pay all costs on an indemnity basis.
The four pages of guidance notes sets out in extensive detail the basic point that the HMRC will not go after pre-2008 QROPS transfers.
In a statement HMRC said, “We had made it clear that we would be publishing this guidance. This is our approach to transfers to schemes on the QROPS list where it is later found that the scheme is not a QROPS.
“Most transfers are made to schemes that are QROPS, so tax charges on an unauthorised transfer will not arise. HMRC’s approach to the taxation of transfers will only affect a small number of transfers made in the specific circumstances set out in the note.”
Bethell Codrington, MD of TMF International Pensions, a division of which was a party in the case, said that the HMRC is “effectively saying is that it is up to the client and his/her adviser to individually check whether an overseas pension scheme complies with the requirements to be a QROPS – self certification – and ensure that the scheme continues to comply with those ever changing requirements of HMRC, and continues to comply with their local domestic regulations.
“If there is any failure, HMRC reserve the right to raise and pursue assessments for ‘unauthorised payment charges’,”