HM Revenue and Customs has amended its list of registered pension schemes in what appears to be a bid for clarity in light of the new pension freedoms, toughening risk warnings and modifying language to emphasise that appearing on the list does not confer authorisation.
The Qrops lists are published bi-monthly on the 1 and 15 of each month, unless HMRC decides to publish a list to remove schemes from the list in between those dates.
Until the most recent list published on 15 April 2015, the lists have stuck to the same formulaic explanation since inception in mid-August 2014, noting the purpose of the list, the completeness of the list, and the consequences of wrong or untimely listing.
Now, a new warning has been inserted on top of each page of the list, and suggests HMRC will take action against those flouting the rules to ‘liberate’ funds by offering access to savings before the age of 55, whilst the majority of the other background text has been removed.
The warning now also refers only to Rops - recognised overseas pension schemes - removing the word ‘qualifying’.
The warning reads: “[HMRC] can’t guarantee these are Rops or that any transfers to them will be free of UK tax. It is your responsibility to find out if you have to pay tax on any transfer of pension savings.
“HMRC will usually pursue any UK tax charges (and interest for late payment) arising from transfers to overseas entities that do not meet the Rops requirements even when they appear on this list. This includes where taxpayers are overseas. HMRC will also charge penalties in appropriate cases.
“Tax relief is given on pensions to encourage saving to provide benefits in later life. Accessing benefits (directly or indirectly) before age 55 will result in a liability to UK tax charges in all but the most exceptional circumstances.
“You should seek suitable professional advice including from a regulated financial adviser.”
James McLeod, head of pensions at AES International, said: “The new preamble which HMRC has inserted on every page of the latest Qrops list reflects the content of the March statutory instrument relating to benefits not being allowed before age 55.
“By including this, HMRC clearly hopes to ensure that people are aware of the extension of the permitted minimum age to all schemes. This includes those in the [EEA] which were previously exempt from that requirement, subject to local legislation, such as Malta.
“One does wonder now, though, what purpose this list really serves consumers as each scheme now arguably needs to be individually checked by the advisory community and certainly by the UK-based scheme making the transfer.”
HMRC’s Qrops list has proved controversial in the past. The watchdog suffered an embarrassing court defeat following a judicial review in 2013, after hundreds of members of a scheme based in Singapore were hit with a tax bill of 55 per cent when their fund was removed in 2008.
The scheme had appeared on the list in 2006, but the Revenue has always maintained that simply being listed does not mean a scheme is authorised as it does not carry out rigorous compliance checks. Warnings over retrospective taxes had not been added to the list until 2007.