Interested in a UK pension transfer to QROPS? HMRC has issued new advice on overseas pensions.
QROPs, or Qualifying Recognised Overseas Pension Scheme, denotes any offshore pension scheme recognised by HMRC into which non-UK residents transfer their UK private or corporate pension, free of tax.
Recently-published guidelines, found on the HMRC website, include seeking independent advice before taking any steps.
A judicial review of HMRC’s QROPS policies had to be conducted after a scheme in Singapore went awry, obliging the tax office cover the legal costs of at least some of the 122 UK pensioners who had transferred their pensions there.
The scheme had originally appeared on HMRC’s approved list for just over one year, but had to be removed in May 2008 after problems were uncovered.
Conducting the review, Mr Justice Charles told HMRC that its behaviour in the case has been “shameful” and ordered it to publish a full statement on its QROPS policy.
HMRC had to admit that the previous wording on its website “may have been misleading” and that had not done any due diligence on the schemes it had originally listed.
It went on to advise: "You should get independent professional advice and confirm with the scheme that it meets the requirements to be a QROPS before agreeing to the transfer."
