Equity Trust, ROSIIP, and QROPS status

The judgment in Equity Trust (Singapore) v HMRC [2011] EWHC 1463 Ch can be downloaded here.

The case, which HMRC won on both limbs, holds that the ROSIIP pension scheme, of which the claimant is the trustee, was not a Qualifying Recognised Overseas Pension Scheme (QROPS) within the meaning of Finance Act 2004.  HMRC was, therefore, correct in its withdrawal of QROPS approval for the scheme in 2008. 

In 2008, Singapore gained a widespread reputation for being a pension "trust-busting" jurisdiction. It is not known how closely, if at all, the claimant or its associates, whether here in London or further afield, were involved in the promotional activities that led to this reputation but it was, nevertheless, a short-lived one. HMRC withdrew QROPS approval for all Singaporean pension schemes. The list, published monthly by HMRC, of approved QROPS continues to reflect a blanket ban on Singapore. 

To those with a particular interest in the legitimate exporting of pension entitlements to non-UK jurisdictions, the case will be of interest and especially in the context of foreign laws and practices being aligned to those here in the UK.

In the wider context, the modern HMRC tendency to punch first and ask questions second, has again been exposed.  Here, we see HMRC acting not just in relation to one taxpayer, or even one intermediary, but in relation to a whole country. And for it only then to become apparent, that over 3 years later, HMRC was still cobbling together evidence to support its position.  

It is unlikely that the promoters of any scheme which seeks to circumvent UK laws, and all the more so by using foreign laws which are "out of sight", will receive any sympathy and that is quite proper. Much the same can be said for the clients of such schemes who, typically, but not always, fall into at least one of the too lazy, too stupid or too greedy categories to merit much sympathy.

Notwithstanding, this increasingly oft-used approach by HMRC of picking on, or painting, unsympathetic targets whilst having little, if any, evidence should be a concern to many.

It can be expected that a considerable amount, in the way of unauthorised payment charges and surcharges from ROSIIP scheme members, is now at stake.  If that is sufficient to justify funding an appeal, if granted, it might be hoped that the conduct of HMRC will then be further scrutinised.