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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who are facing unexpected tax bills after the fund had its Qualifying Registered Overseas Pension Scheme (QROPS) status withdrawn in 2008.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.