Thousands of British expats fury over 55% tax demand on QROPS scheme

by Ray Clancy on September 8, 2010

Thousands of British expats who invested in what they thought was a Qualifying Recognised Overseas Pension Scheme face 55% tax charges after the UK taxman decided it does not meet the correct criteria.

The investors are furious that HMRC appears to have initially said that the Beazley Consulting Pension Scheme did qualify as a QROPS then changed its mind.

They are facing paying out 40% of the amount they transferred to the Hong Kong based scheme and a 15% surcharge on top.

However, although it would not discuss individual situations, HMRC said it will waive the 15% surcharge if each investor can show that they believed they were putting their money into a genuine QROPS scheme.

The taxman will also consider appeal against the 40% unauthorised payment charge, again on an individual basis.

Legal firm DLA Piper, which has been brought in to act on behalf of Beazley, said the correct advice was sought when the scheme was set up. ‘The Beazley Consulting Pension Scheme was set up in 2007. At the time Hong Kong lawyers advised that the scheme met HMRC’s criteria to qualify as a Qualifying Recognised Overseas Pension Scheme in the UK,’ it said in a statement.

‘Appropriate legal advice was taken in Hong Kong before Beazley Consulting submitted its application to HMRC and HMRC accepted that the scheme met its relevant criteria. Some 18 months later, after taking its own advice, HMRC decided that the regulations to which the scheme was subject did not meet its criteria and that the scheme no longer qualified as a Qrops.

‘This decision also affected other similar schemes. Since then Beazley Consulting has been working closely with HMRC to resolve the issue and has advised members of the best way forward.’

{ 1 comment… read it below or add one }

Jaques October 6, 2010 at 9:19 am

Why would anyone believe any schemer on tax….they hae once commencingthought "how can I make a big quid out ot this" not "how can I make life better for my fellow man"..always check with the tax department to see if a scheme is on the nose or on the level,

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