The taxman faces another fight in court over banning Singapore QROPS as the providers have announced they intend to appeal their defeat in London’s High Court.
Equity Trust, the firm behind the failed Panthera Recognised Overseas Self Invested International Pension (Rosiip) claims the court ruling leaves the way open for HM Revenue and Customs to tackle other providers suspected of abusing pension rules.
In a statement, a spokesman for Equity Trust said that under the current ruling, any QROPS that has discretionary power to exclude applicants could be closed by HMRC.
This power is thought to be a standard clause in many QROPS pensions that gives trustees the authority to block transfers if they consider they are not bona fide – for example, to allow money-laundering.
The judge gave Equity Trust leave to appeal – and the firm claims the judge made a wrong decision.
The Panthera Rosipp was shut down when HMRC withdrew consent for Singapore to operate QROPS offshore pension schemes around three years ago.
HMRC claimed the scheme was not a QROPS because the trustees did not register with financial regulators in Singapore nor was the scheme open to Singapore residents.
QROPS rules say the offshore schemes must be regulated and open to residents in the country where they are based to qualify for recognition by the UK taxman.
Equity Trust argued their pension could not register because the Singapore financial authorities judged it was a foreign trust and not a pension scheme. They also claimed the scheme was open to Singapore residents but failed to convince the judge of this.
The financial consequences of the High Court decision affect both investors who put money in to the Panthera QROPS and the UK pension firms who transferred money as the transfers now become unauthorised pension withdrawals.
Under tax rules, both the investors and pension transferees may have to pay penalties of up to 55% of the transfer value of funds paid in to the scheme.
Contact QROPS.net for help on transferring your UK pension into a QROPS.