Singapore QROPS No Longer Recognised By HMRC

After a prolonged three year dispute, Singapore based QROPS have lost an appeal against an HMRC decision to remove their recognised status.

London, UK (Pryce Warner International) May 31st, 2011 – The immediate impact of the decision will be that the HMRC can now levy a 50% tax on those drawing QROPS in Singapore. The decision also means that some QROPS may be closed altogether.

The court found that Panthera Recognised Overseas Self Invested International Pension (Rosiip) was not open to Singapore residents and that there should have been a regulator in Singapore with which it was registered.

The trustee of Singapore based Panthera QROPS, Equity trust, have launched an appeal against the decision. They claim that other QROPS may be forced to close if the ruling remains in place.

In 2008 Equity trust were removed from the approved QROPS list after the HMRC ruled that they did not meet the proper conditions of the pension scheme. In 2010 Equity appealed the decision claiming that the ruling was wrong and that they should not have been removed from the approved QROPS list.

This ruling is bad news for members of the Panthera QROPS scheme. Current legislation dictates that individuals that transfer pensions or pension assets to overseas schemes not approved by HMRC can be liable for a tax penalty of up to 55%.

QROPS overseas pensions were in introduced in 2006 as a means to allow retired British Expats residing abroad to maintain a secure income. This ruling comes at a time when many other QROPS regions are introducing more coherent guidelines to ensure that the scheme is offered to the proper candidates as does not contravene any HMRC guidelines.

The decision indicates that there is a greater need for clarification on the exact guidelines for QROPS as the guidelines in some regions are overly narrow or obsolete, which can make it very difficult for eligible candidates to claim a QROPS.

David Harra, a Senior Market & Investment Analyst with Pryce Warner International, specialists in the provision of QROPS overseas pensions commented: “This is unfortunate news for holders of QROPS in Singapore. Though there is not an official regulator in the region there has always been a strict adherence to an unofficial code that fell within HMRC guidelines. QROPS holders in Singapore are likely to take a hit to their income as they may now be liable to a 55% tax penalty. This is indeed cause for concern and many members of the scheme will now need to seek out other means to ensure that they are able to maintain a secure income while retiring in Singapore. One upside of the ruling is that it shows the HMRC are committed to ensuring that the scheme is used legitimately and this should prompt clearer guidelines for providers in regions where there is ambiguity.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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