Tax Man Should Lift The Secrecy Over QROPS

It’s about time the tax man came clean over what is believed to be so wrong about QROPS pensions for expats in so many countries.

The number of these pensions available for expats has yo-yoed with incredible discrepancy over the years.

Each time HM Revenue & Customs has acted, it’s been behind a cloak of secrecy and hints that schemes are breaking compliance or tax avoidance rules without any specific allegations against any provider or financial centre.

Since April, more than 400 QROPS have lost their status.

HMRC says the latest moves were housekeeping to check compliance.

No comment about delisting

“‘The April and May Pension Schemes Newsletters set out the planned changes to the scheduled publication of the ROPS notification list this month.  This has allowed for an update for the removal of schemes that either have notified us that they no longer meet the requirements due to the regulations that took effect from 6 April or did not reply to the information notice we sent out. It will be published as soon as possible,” said an HMRC spokesman.

It’s clear HMRC declines to comment about individual schemes due to a fear of saying the wrong thing.

But look at how QROPS have navigated some jurisdictions.

Guernsey has been singled out over the years for special treatment with no real official reason why.

In January 2012, Guernsey hosted 310 QROPS. This slumped to just three after an HMRC compliance check, but climbed back to 152 by April 6, 2017. Then 100 schemes were cut, followed by another 25 this month.

Let’s see some transparency over QROPS

This is obviously worrying for QROPS investors, who could face paying large penalties if their pension fails the qualifying rules to become a QROPS.

But HMRC refuses to confirm is a scheme is a bona fide QROPS and puts that burden on retirement savers.

Providers are told on pain of financial penalty that they cannot transfer UK pension funds to a pension not on the ‘official’ QROPS list and goes to great pains to explain appearing on the list does not constitute official approval.

This silence and lack of information from HMRC is no help to expats and international workers who want to access their money from overseas.

What is needed is clear and transparent guidance and compliance.

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