Equity Trust, the group behind the ill-fated Panthera ROSIIP (recognised overseas self invested international pension) took the case to court in a bid to overturn HM Revenue and Customs withdrawing QROPS status from Singapore three years ago.

Now, with their defence in tatters, Panthera’s QROPS customers face tax penalties of 55% of the value of their transfer funds for breaching QROPS transfer rules. UK pension providers who transferred client funds to Panthera may also face similar tax penalties.

The judge kicked out Equity Trust’s claims that HMRC was wrong to withdraw QROPS status from their pension scheme – but granted leave to appeal due to the financial ramifications the decision has for all QROPS schemes.

QROPS transfers broke pension tax rules

HMRC booted Singapore and the Panthera scheme off the list of HMRC QROPS providers in 2008 after suspecting some investors were withdrawing cash from their schemes against pension tax rules.

In explaining the decision, the judge agreed with HMRC that the Panthera scheme should have been open to Singapore residents to meet QROPS qualification rules, but regulators in Singapore considered it was a foreign trust and would not register the scheme as a pension, effectively closing the pension to investors living there.

Subsequently, Panthera promoted the scheme on the tax benefits offered by the trust status.

Equity Trust could show only six ‘possible’ Singapore residents invested in the QROPS and failed to persuade the judge that their problems registering with regulators arose from the Panthera rosiip being a personal pension rather than an occupational scheme.

On the web, Equity Trust bills itself as ‘the world’s leading independent provider of trust and fiduciary services with 1,200 employees operating across a global network of more than 30 jurisdictions.’

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.

A judge in the High Court has set a four-week deadline for HM Revenue and Customs to present their case.

The move came after Equity Trust, a trustee of delisted Singapore QROPS provider Panthera challenged HMRC’s decision to remove the coveted QROPS pension status from the firm.

HMRC banned all Singapore QROPS in 2008 on the grounds the Panthera QROPS failed to meet the conditions of the recognised offshore pension scheme.

The two sides are arguing over a condition in QROPS rules that states a scheme must set aside 70% of the fund to provide investors with income for life and that any pension benefits must not be paid before the normal minimum pension age.

Now, HMRC must provide the court with evidence supporting the ban. Equity Trust has 14 days to respond and the judge has set the earliest available date after May 17 for a full hearing.

The judge commented the case had continued for too long and should be resolved.

Bethell Codrington, managing director of Panthera, says: “What the trustees have always aspired to do is protect the investors, and the only option open to us to try to resolve this was through the High Court.”

When a QROPS scheme is deregistered, transfers of funds in to the scheme become ‘unauthorised’ payments and attract a tax penalty of 55% of the fund value.

The Panthera Singapore QROPS was the first scheme to lose HMRC status. Since then other schemes in Hong Kong have also been banned.

HMRC and other jurisdictions are also though to be locked in negotiations over perceived QROPS infringements.

Gibraltar QROPS providers have tried to start schemes since the end of 2009 in a disagreement over tax rates for pensioners.

The trustee of the Panthera ROSIIP pension fund has applied to the High Court to have the QROPS restored to the HM revenue and Customs list of QROPS schemes.

Equity Trust established Panthera as a joint venture with Credit Suisse subsidiary Clariden Leu.

Singapore was subsequently removed from the HMRC published list of QROPS schemes in May 2008.

HMRC ignores pre-action letter

To date, speculation about the reasons has spread in the QROPS industry and press, but HMRC has refused to explain why the action was taken.

Equity Trust chairman wrote to policyholders in January explaining a pre-action letter had been sent to HMRC demanding that QROPS status should be restored to the ROSIIP scheme, but no reply had been received.

The letter from Equity Trust director Fredrik van Tuyll also claimed ROSIIP was managed within QROPS legislation.

QROPS.net is a leading financial firm with a successful track record of completing QROPS pension transfers.

Regaining QROPS status is seen as important to Singapore as the country is building a reputation as a financial centre. Several banks and insurance companies have their Far East operations headquarters in the small state.

Each QROPS transfer has been with the help of a dedicated team of QROPS.net consultants who deal directly with Singapore QROPS clients.

All Singapore QROPS were delisted from the HM Revenue and Customs (HMRC) list of QROPS providers in May 2008 over rumoured allegations of miss selling the pensions.

The Singapore QROPS providers repeatedly denied any allegation of wrongdoing and claim HMRC did not understand how Singapore’s financial and tax rules applied to QROPS.

Nevertheless, the doors remain closed on Singapore as a QROPS centre as HMRC has not overturned the previous delisting decision.

We have worked closely with many schemes around the world to find a solution for Singapore QROPS clients and we are pleased to say this has paid off with transfers out of Singapore in to other QROPS schemes for more than 1,000 QROPS pension holders

These transfers have helped a lot people with big worries over what would happen to their money and how they would fund their retirement.

HMRC has also clamped down on QROPS schemes in Guernsey and Gibraltar within recent months, but neither was delisted after QROPS providers and tax authorities agreed to bring their schemes in line with HMRC guidelines.

Recent figures disclosed about 3,500 transfers are made from UK pension schemes to QROPS each year. Transfers so far total more than £0.5 billion.

One of the changes noticed has been the addition of a “Disclaimer” on the list of QROPS. The disclaimer reads:

“If a scheme has been included on this published list in circumstances where it should not have been included because it did not satisfy the conditions to be a recognised overseas pension scheme, any transfer that has been made to that scheme could potentially give rise to an unauthorised payments charge liability for the member.”

This has caused a concern for many people who have a QROPS or who are considering a transfer into one, as the unauthorised payment charge can wipe out 55% of the pension.

This is a statement from HMRC highlighting their legal position. It shows that it is up to the individual to receive correct, sound and regulated advice before making a decision.

QROPS.net is highly regulated in the UK and Europe giving us a global reach to service individuals around the world. We aim to provide the highest quality of advice internationally.

QROPS.net look at all QROPS available and find the best, most secure, most suitable QROPS for you. Providing the best QROPS solution that achieves your goals. We are not associated or linked with any individual QROPS provider and therefore can give impartial, unbiased advice. Our goal is to help you make the right decision and get the right QROPS.

To discuss any questions you may have about QROPS or to find out how we can help you, please contact us via the contact form

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