The associate at City law firm Squire Sanders said the taxman’s application to withdraw its case earlier this year against a group of people that had invested in the Recognised Overseas Self Invested International Pensions Retirement Trust “could make people hesitant when considering Qrops, as they cannot be certain that HMRC’s list of approved schemes is reliable”.
The Rosiip scheme, which is administered by TMF Trustees Singapore, had initially been listed by HMRC as a Qrops scheme between November 2006 and May 2008.
But in 2008, HMRC found there to be a defect in the application and its approval was removed retrospectively.
The change in status left pension holders in the scheme facing tax bills of 55 per cent of the value of their pensions at transfer, prompting a group litigation order in April 2012. HMRC initially contested the order at the court of appeal, before withdrawing in June 2013 and agreeing to publish guidance over Qrops transfers. While the Rosiip scheme was not found to be technically a Qrops, HMRC agreed to pay costs on an indemnity basis to investors, based on the charges it had imposed.
Ms McGhee said the initial action meant Qrops investors faced ongoing uncertainty.
She added: “The taxpayer has to be satisfied that he is transferring his pension to a Qrops. I thought Rosiip was a Qrops and I do this for a living.” A spokesman for HMRC said it was satisfied with the guidance it published on Qrops schemes.
Geraint Davies, managing director of Surrey-based financial planner Montfort International, said: “The message here is that each Qrops constitutes complex advice. Each one has to have a seriously robust compliance scheme and bullet-proof operational processes. No doubt these controversies will rumble on until the penny drops.”