HMRC indefinitely postpones publication of updated ROPS list
HM Revenue & Customs will not publish its long-awaited, updated ROPS list – suspended since Friday – today, even though that had been the plan.
The government tax agency didn’t give a reason for the delay, nor did it say when the revised list will be published, beyond saying that it would be “as soon as possible”.
However, it is thought that the revisions to the list might be taking longer than expected, and that the fact that there is a general election taking place in three days’ time could also be affecting day-to-day operations in government offices, including the Treasury, of which HMRC is a part.
In a statement, an HMRC spokesperson told International Investment: “The April and May Pension Schemes Newsletters set out the planned changes to the scheduled publication of the ROPS notification list this month. This has allowed for an update for the removal of schemes that either have notified us that they no longer meet the requirements due to the regulations that took effect from 6 April, or did not reply to the information notice we sent out.
“It will be published as soon as possible.”
As reported, the updated list is of considerable interest to the UK pensions transfer industry, because it will reveal, once and for all, what HMRC considers acceptable for a scheme, and jurisdiction, to meet its latest requirements.
The concern of some industry practitioners is that, following a steady shrinking in the number of schemes on the list – and even, the elimination of several countries altogether from the list, including Canada and the US – many more schemes and jurisdictions will disappear, once the revised list is finally published.
The cull is the result of a new effort by HMRC and Treasury officials to more closely regulate the UK’s pension transfer industry, in response to growing complaints from out-of-pocket savers.
As of 6 April, scheme managers wishing for their schemes to continue to be a qualifying recognised overseas pension scheme (QROPS), or ROPS, as HMRC now calls them, have been required to confirm to HMRC that their scheme meets its “revised requirements”.
Scheme managers that previously had been required to designate 70% of an individual’s transferred funds to providing that individual “with an income for life” once retired are now required to complete and return a set of new forms provided to them by HMRC, which confirm that their scheme meets the new Regulatory Requirements, no later than 1 June.
It’s understood that the revised list HMRC ultimately publishes will be based on the information provided to it via these forms.
It’s been a year of unexpected developments for the UK pension transfer industry, beginning with the surprise disappearance of a number of countries from the official online list – updated every two weeks – and then, with the news, contained in UK Chancellor Philip Hammond’s Spring Budget on 8 March, that a 25% tax would be levied on most pension transfers out of the country. Under the new rules, exceptions would be made in certain situations in which individuals might have a genuine need to transfer their pension, including when the individual was moving to or returning to a country located within the European Economic Area.