HMRC have confirmed that their ROPS list, previously QROPS list, is currently suspended having not been updated mid-month as expected. They have stated that a new one will be produced for the 1st of July.
This can be viewed as good news despite how it may first appear. The reasoning behind the mid month omission is that HMRC issued all recognised overseas pension schemes (ROPS) with a letter asking them to confirm that the minimum age rule is in force. They have until the 19th of June to respond or face exclusion. As clarification, this hiatus of skipping one bi-monthly report is to enable HMRC to await conformation that QROPS providers are following the rules and regulations that have been in place since April.
Update: A note has been issued by HMRC clarifying the suspension. As expected, pensions that do not meet all the rules cannot be deemed Qualifying Recognised Overseas Pension Schemes (QROPS) resulting in them being liable for a tax charge. From the 6th of April this included the Pension Age Test. This is irrespective of whether they appeared on the last ROPS list or not. However, should your pension lose it’s QROPS status after your pension transfer has been completed you can avoid this charge.
HMRC have also stated that when the new list is published it will be in a new format. Although it is unknown what this entails we can hope that it marks a return of the original QROPS list i.e. all providers are deemed qualifying. There is sufficient evidence to suggest that this may happen. Firstly, the original purpose of the list was to help predominantly UK based pension schemes ascertain, to a fair degree, which overseas pension schemes were QROPS. Under the recent wording the list has been next to useless in this respect. Furthermore, with the letters demanding confirmation that schemes comply with the UK minimum age of 55 there can now be no doubt that accessing your pension early will result in penalties under all but a tiny minority of cases. Finally, the laws governing QROPS are clear with QROPS providers obliged to notify HMRC within 30 days should they no longer meet the qualifying requirements. This provides a platform for the return of a true QROPS list.
In the event that your QROPS provider loses their qualifying status this does not automatically mean that you will be liable for a member payment charge which is normally due on transfers to non qualifying schemes. In the event of a QROPS being delisted the outcome is dependent upon your circumstances.
Don’t fear HMRC’s QROPS list suspension
Posted on by Liberty Wealth
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