Last year, a group of lawyers from law firm Dorsey and Whitney warned 122 investors in Singaporean pension scheme Rosiip that as it was no longer listed as a qualifying overseas pension scheme, their savings could be at risk of retroactive penalty charges by HMRC.
HMRC manages a list of recongised Qrops, which allow savings to accrue completely free of UK tax. If a scheme is removed from the list, HMRC can apply retrospective unathorised payment charges of 55 per cent and charges can extend as high as 70 per cent if penalties are applied.
HMRC states that the inclusion of a scheme on the list is not a guarantee that it is a qualifying scheme and thus its status is subject to change.
According to lawyers acting for investors, Rosiip applied to become a registered Qrops in 2006 and most of the affected individuals transfered their pension into Rosiip in the tax year 2007-08. According to the firm, HMRC removed Rosiip from the list of Qrops in May 2008.
The Court of Appeal ruled in 2011 that Rosiip have never satisfied the criteria to qualify as a Qrops.
In June 2012 the High Court granted a group litigation order for members of the scheme. At a permissions hearing on 2 May the lawyers, now at Hage Aaronson Limited, received permission to push ahead with a full hearing on behalf of 37 individuals whose pension savings are at risk.
The hearing will last three days and is due to begin on 17 June at the High Court.
Robert Waterson, senior associate at Hage Aaronson, said: “We are now in full preparation for trial.
“The act of transferring the pension abroad is a chargeable act unless that transfer is made to a Qrops. They issue a notice of assessment to people who have made the transfer; it’s the equivalent of a tax bill.”
Although the assessment stage usually follows an initial ‘enquiry’ stage, most of the 37 individuals in the group litigation order were not subject to enquiries before receiving their assessment, Mr Waterson said.
“Enquiry is basically a hold pattern. It puts a stop on when the Revenue has to take action.”