HMRC’s 663-strong list of recognised overseas pension schemes (Rops) has been branded “useless” by a financial planning firm specialising in expatriate advice.
James McLeod, head of pensions at London-headquartered AES International, said the list published last week would provide no help to anyone hoping to transfer his pension.
He warned this could ultimately lead to some UK schemes refusing overseas transfers altoghether.
Mr McLeod said: “The list as it currently stands, even in its revised form, is useless. HMRC continues to state that anyone transferring a pension scheme from the UK cannot rely on inclusion on the list as any evidence that a receiving scheme is a Rops.
“This makes the list an irrelevant document.”
Mr McLeod said that if a transfer were made to a scheme on the list which proved not to be a Rops, then there would be unauthorised payment charges.
But, he added, the opposite should also apply, so that if the provider of a UK scheme were satisfied an overseas scheme which was not on the list met the Rops conditions, it should be happy to transfer to it.
He said: “We can see no reason why any UK scheme should take any notice of the list. This extra burden of responsibility may lead some UK schemes to refuse overseas transfers altogether, and it will reduce confidence so far as clients and advisers are concerned.”
In the preface to the list, HMRC said it could guarantee any of the schemes listed are Rops or that any transfers to them will be free of UK tax. It stated: “It is your responsibility to find out if you have to pay tax on any transfer of pension savings.”
Claire Carey, a partner at City law firm Sackers, agreed that the lack of certainty surrounding the list could present a problem for trustees.
She said: “Trustees faced with a transfer request to a recognised overseas pension should carry out reasonable due diligence to satisfy themselves that the transfer will be recognised, and that it will not give rise to adverse tax consequences for the member or the scheme.”
Right to reply
A spokesman for HMRC said: “Appearance on the list only signifies that a scheme wanting to appear on the list has notified HMRC and made the required undertakings.
“Appearance on the list does not indicate that a scheme has met the requirements to be a ROPS.
“To be a QROPS a scheme must both notify HMRC and meet the requirements to be a ROPS, so appearance on the list does not guarantee that a transfer will be free of UK tax.
“HMRC does not and never has registered or approved QROPS. This has always been the case.”