HMRC is monitoring the activities of  some irresponsible international firms offering ex pats advice about switching pension funds from the UK to offshore schemes.

Investigators are building evidence against schemes thought to abuse tax rules with a view to removing them from the HMRC list of registered QROPS pensions.

An HMRC spokesman confirmed the move but declined to comment about any particular schemes under investigation.

Since QROPS started in 2006, offshore pension schemes have been closed down in Singapore and Hong Kong, leaving investors facing tax penalties of 55% of the value of the pension fund transferred in to the scheme.

Further tax charges are also expected as the pension funds are no longer exempt from inheritance tax as they were within a QROPS scheme.

Recently, a couple who transferred more than £250,000 offshore to avoid tax have had to pay £86,000 in penalties after the taxman objected to the scheme, reducing their retirement savings to £145,800.

Neil and Megan Gratton were hoping to save tax and avoid buying an annuity with their pension under a scheme devised by Malcolm Tune, a financial adviser later convicted of fraud.

Regulators in Spain and Dubai are also cracking down on advisers offering dubious offshore financial advice.

The issue is not QROPS offshore pensions – the investment vehicle is robust and regulated by HMRC – but unscrupulous advisers charging high fees for strategies that break the rules and leave customers high and dry facing fines and reduced retirement savings.

The message from regulators is clear – if you transfer pension funds to a QROPS check out that your adviser and provider are regulated and are part of reputable and experienced firms who can demonstrate a track record of successful QROPS transfers.

Experts believe that the selling of “pensionbusting” promises, by unregulated advisers was the downfall of QROPS in Singapore. With little or no regulation of advisers in many worldwide locations, there is clearly a risk of abuse.

It is very important for UK expats to seek advice from regulated companies & advisers such as QROPS.net advisers. We urge all individuals to do a simple background check on all financial advisers and ask them to provide a regulatory number from the governing body before you proceed.

To find out more about QROPS.net advisers and how we have the highest regulation standards, please contact a QROPS adviser