HM Revenue and Customs has revealed that it will no longer pursue unauthorised payment tax charges over transfers to Qualifying Registered Overseas Pension Schemes made prior to September 2008, following a recent court defeat.
In a guidance note published on the HMRC website today (27 November), the Revenue says it will not “raise or pursue any assessments resulting from a transfer from a registered pension scheme to a scheme purporting to be a Qrops” made before 24 September 2008.
A spokesperson added that anyone who has paid tax on a transfer before this date to a Qrops that appeared on the list of qualifying schemes at the time should contact HMRC.
Schemes are added to HMRC’s Qrops list on submission of a valid application, but are only retrospectively checked. Transfers to schemes that are subsequently removed from the list are subject to aunthorised tax charges of at least 55 per cent.
Since September 2008 the Revenue has included a caveat which it claims makes clear the list does not evidence HMRC approval of a scheme as a Qrops. No such disclaimer was included before this date.
HMRC said the climbdown follows a recent court defeat in the case of R (Gibson) vs Commissioner for HM Revenue and Customs.
In another recent court defeat, HMRC conceded defeat in the High Court and agreed to pay the applicants’ legal costs after a number of investors in Singaporean pension scheme Rosiip brought a judicial review over retrospective tax charges levied by HMRC.
According to lawyers acting for investors, Rosiip applied to become a registered Qrops in 2006 and most of the affected individuals transferred their pension into Rosiip after it was added to the HMRC list in the tax year 2007-08. According to the firm, HMRC removed Rosiip from the list in May 2008.
HMRC has said it will continue to pursue claims “where there is evidence relating to the transfer of dishonesty, abuse, artificiality or any similar circumstances and the imposition of relevant tax charges in relation to the transfer appears not to be unfair”.
The guidance note gives examples such as cases that “disclose fraudulent activity in which members collude in respect of relevant transfers”, or “where there is falsification of documents or information”.
It states: “In these kinds of cases we are likely to raise assessments even where the transfer took place before 24 September 2008.”
A spokesperson said: “If anyone has paid tax on a transfer made before 24 September 2008 to a scheme that appeared on the QROPS list at the time of the transfer then they should contact HMRC.
HMRC will consider each case on an individual basis, including whether there is abuse or artificiality in relation to the transfer, for example where artificial arrangements have been made for immediate access to funds.”