RPSM14101055 - Technical Pages: Transfers: Recognised transfers from registered pension schemes: Qualifying recognised overseas pension schemes: Removal of schemes from published list

Removal of schemes from published list

Because of confidentiality rules HMRC cannot say why a particular scheme is no longer included on the published list of qualifying recognised overseas pension schemes (QROPS) unless it receives written authorisation from the scheme manager to divulge information to a named individual.

In general terms a scheme may be removed from the list in the following circumstances:

1. a QROPS has asked to be removed from the list but it is still a QROPS,
2. a scheme was eligible to be a QROPS when it applied and has its QROPS status withdrawn because it has ceased to be a recognised overseas pension scheme, or has been excluded from being a QROPS because it has failed to comply with the information requirements about transfer members (see RPSM14101058 and RPSM14101070),
3. HMRC has discovered that a scheme’s original notification that it was a recognised overseas pension scheme was inaccurate.

The taxation implications for members and scheme administrators of registered pension schemes transferring benefit rights in those circumstances are respectively as follows:

1. Transfers to the scheme made before and after publication of the list which has been updated to remove that scheme will be recognised transfers under section 169 so they will not give rise to an unauthorised payments charge (or an unauthorised payments surcharge) on the member or to a scheme sanction charge on the administrator.
2. Transfers to the scheme made before withdrawal of its QROPS status, or its exclusion from being a QROPS, will be recognised transfers so they will not give rise to an unauthorised payments charge (or a surcharge) on the member or to a scheme sanction charge on the administrator. Transfers made after the date on which the scheme ceased to be a recognised overseas pension scheme, or after the date on which it failed to comply with the information requirements, will not be recognised transfers and will give rise to an unauthorised payments charge (and surcharge) on the member and to a scheme sanction charge on the administrator (see RPSM04104500, RPSM04104600 and RPSM04104800).
3. Transfers made to the scheme after 5 April 2006 will not be recognised transfers because the scheme will not, as a fact, have been a QROPS at any time. They will give rise to an unauthorised payments charge (and surcharge) on the member and to a scheme sanction charge on the administrator.

Where the scheme administrator has relied in good faith on the fact that the overseas scheme is included on the latest published QROPS list when making a transfer to it this should provide just and reasonable grounds for HMRC to discharge their liability to the scheme sanction charge if the scheme is subsequently withdrawn from the list by HMRC (see RPSM04104870).

This is on the basis that the administrator is expected to have carried out reasonable checks. Before making an overseas transfer the administrator should have checked the published QROPS list, and in particular must have done so no more than one day before the transfer was made. The administrator should keep in their file a printout of the page from the list including the QROPS from the day before the transfer (and also retain a copy of the overseas scheme’s QROPS acceptance letter if this has also been obtained).

These actions should also provide just and reasonable grounds for HMRC to discharge any liability of the member to the unauthorised payments surcharge (see RPSM04104780). These discharges can be made under section 268.

However, there may still be an unauthorised payments charge liability for the member in these circumstances (see RPSM04104510). Enforcement of that charge will depend on the particular facts and circumstances of each individual case.