QROPS Legislation

HM Revenue & Customs introduced the Qrops Legislation in 2006 with the aim of helping UK pension holders who now live overseas. Since then the HMRC has had to display some of its power since discovering masses of miss-selling and pension busting schemes. The HMRC clamped down hard to uphold the legislation

Concerns over miss-selling have grown since the whole Singapore jurisdiction was struck off the Qrops list. HMRC can and will delist any scheme that falls short of its strict legislation. They look closely at the transfer operation of the Qrops provider and look closer for any signs of abuse.

If a Qrops scheme does not follow the Qrops Legislation then the scheme will not be deemed as being recognised, even if the scheme is currently on the Qrops list. If a transfer is made to an unrecognised scheme, this will be seen as an unauthorised transfer. An unauthorised transfer will result in a 55% tax being charged to the member.

Unregulated Advice

Financial Advisers that advise an individual to transfer into a Qrops, that at a later date becomes delisted, could face a claim against them. However, many IFAs that work abroad are not regulated. Overseas financial regulations are very weak and it is very likely that the bad advice, from a non regulated adviser, would only harm the individual.

There have been talks about the HMRC revising the Qrops Legislation to include tighter rules to stop the abuse, miss-sseling and pension busting schemes. The hard facts are that any benefits taken from the Qrops scheme must not breach the Qrops Legislation. All Qrops schemes HAVE TO comply with the Qrops Rules set out by HM Revenue & Customs.

To find out if a Qrops scheme complies with the Qrops Legislation, contact us by filling out the form on the contact Qrops Adviser page or email us direct.