HMRC To Resist Pensioners' Claims In ROSIIP Case
Tuesday, August 7, 2012
The UK tax authority, HM Revenue and Customs (HMRC) has announced it is “actively
resisting” a group litigation brought by former members of a Singapore-based
investment fund, who are facing unexpected tax bills after the fund had its Qualifying
Registered Overseas Pension Scheme (QROPS) status withdrawn in 2008.
The investment fund, promoted by Panthera Recognized Overseas Self-Invested
International Pension (ROSIIP), notified HMRC in 2006 of its QROPS status, and
was included in HMRC's QROPS list shortly thereafter. However, HMRC challenged
this in 2008 when it erased Singapore from its allowable overseas destinations
for UK pension schemes amid suspicions of abuses after the five-year reporting
period to HMRC elapsed.
Furthermore, HMRC found in 2008 that ROSIIP was not eligible for transfers of
UK pensions under the QROPS scheme on the grounds that the fund was not available
for Singapore residents and that it was not registered with the local pensions
regulator. As a result, the UK High Court ruled against Panthera in 2011, holding
that ROSIIP had never been a QROPS and that all tax-free transfers of UK pensions
to ROSIIP were consequently unauthorized and subject to tax charges of up
to 55% on total transfers in addition to administrative surcharges levied on
ROSIIP itself and initial UK pension funds. This ruling was confirmed in 2012
in the Court of Appeal.
Ex-ROSIIP members have recently sought a judicial review of HMRC's decision,
arguing that, as ROSIIP was part of HMRC's QROPS public listing at the time
of transferring their pensions between 2006 and 2008, they had legitimate expectations
that ROSIIP was a regular QROPS.
"HMRC is actively resisting these claims and any further claims brought
may be out of time," the department announced last week.
As the amounts at stake for pensioners are significant, a meaningful precedent
arising from the case might ultimately be set.