Last week the Right Honourable Sir William Charles, known as Mr Justice Charles, accepted HMRC’s application to withdraw and has given the taxman 21 days to respond to his recommendations. He will then publish a judgement.
The Rosiip Qrops was listed by HMRC from November 2006 until May 2008. Pensioners had transferred their savings to it but in 2008 HMRC found there had been a defect in the application and it was removed retrospectively.
This meant that all pension holders in the scheme were faced with a tax bill of 55 per cent of the value of the pension at transfer.
A group litigation order was brought in April 2012 by City law firm Hage Aaronson to appeal on behalf of the pensionholders. It was initially contested by HMRC until Friday 21 June when Mr Justice Charles accepted the taxman’s application to withdraw from the case.
Robert Waterson, senior associate for Hage Aaronson, said: “The pension holders had acted at all times in good faith and HMRC’s decision to withdraw the assessments means that they no longer face the prospect of losing 55 per cent of their savings for retirement.”
While the withdrawal does not affect the legal status of the Rosiip fund itself, it is understood that Mr Justice Charles has given HMRC 21 days to write to him, outlining how it will review its approach to the Qrops system as a whole, and when it will issue a public statement delineating what qualifies for Qrops status.
A spokesman for HMRC could neither confirm nor deny whether or not it has dropped the case. When asked if HMRC would put out a statement later on the judge’s comments, he said HMRC was unable to comment.
Adviser view
Nigel Green, founder of international wealth management firm the deVere Group, said: “HMRC has made the correct and fair decision to abandon this case. It would have been inappropriate to pursue it after individuals were led to believe that this particular Qrops was authorised by the tax authority and then invested in it, only to discover it had been delisted and taxes of 55 per cent had been applied.”
