Continuing a pattern that has become familiar to those in the cross-border pension transfer industry over the last couple of years, HM Revenue & Customs unexpectedly removed all 19 Hong Kong ROP schemes when it updated its most recent online list, as it does every two weeks.
While there were some 19 Hong Kong schemes listed when the list was updated on 17 November, there were none on the updated list that was published on Friday.
In the past, HMRC has, without warning, removed all, or nearly all, of the schemes that had featured on its list only a few weeks before of such jurisdictions as Australia, Guernsey, the US, Canada, France and Italy.
Some, such as France and Italy, still currently don’t have any schemes listed, while the US has just one.
Once again, the latest update of the much-watched online list is generating comment among those in the business of helping those with British pensions who wish to transfer them outside of the UK to do so.
According to Geraint Davies, managing director of the UK advisory firm Montfort International, and a seasoned observer of HMRC’s ROPS list, 21 schemes have vanished from the list since it was last published – including, in addition to the 19 Hong Kong schemes, one Irish and one Isle of Man scheme.
At the same time, some 32 were added, he said, including 20 from Australia, two from Guernsey, eight from the Isle of Man and two from Jersey.
Davies said he didn’t know why the Hong Kong schemes had been removed, but noted that HMRC has removed all the schemes from other jurisdictions in the past – perhaps most memorably in April, 2015, when it removed all but one of some 1,653 Australian schemes from the list, on grounds that they had failed to meet its then-new Pension Age standard.
Another pension transfer industry expert, who didn’t wish to be quoted, pointed out that Hong Kong’s Mandatory Provident Fund Schemes Authority – which oversees occupational retirement schemes in the jurisdiction – had recently expressed concern over “persons/firms claiming to be investment companies/advisers” had been promoting to the general public via the internet the use of occupational retirement schemes under Hong Kong’s Occupational Retirement Schemes Ordinance”. This, the pension transfer industry expert noted, could have prompted a re-appraisal on the part of HMRC of the 19 schemes on its list.
Asked if this were the case, a spokesperson for HMRC reiterated the agency’s long-standing policy of declining to comment “on identifiable individuals or pension schemes”. HMRC typically tells those with questions about why overseas pension schemes are no longer on the list to consult its online Pensions Tax Manual.
US schemes in focus
Earlier this year, it was US schemes that were in the British tax authority’s crosshairs, as the last of what had been 13 schemes as recently as April 2015 vanished.
With respect to the Canadian ROP schemes, they began to disappear in the wake of the introduction of the Pension Age Test, before which, at one point there had been some 68 Canadian schemes.
Then, in mid-November of last year, HMRC’s updated list contained 49 fewer Canadian ROP schemes, and none of the 19 Italian ROPS and 11 French ROPS that had been on the list just two weeks before. By February of this year, all the Canadian schemes were gone.
Source: Montfort International
Until recently, ROPS, or Recognised Overseas Pension Schemes, used to be known as Qualifying Recognised Overseas Pension Schemes, or QROPS, but HMRC removed the word “qualifying” in an effort, it is widely believed, to make clear to consumers that the schemes in question had not been formally authorised by the tax body. The result is that both acronyms seem to be in use at the moment.
Qualifying Recognised Overseas Pension Schemes were introduced into UK law in 2006, as a result of the so-called A-Day pension reforms, first proposed in 2004, and aimed at simplifying the UK’s pensions regulations while at the same time aligning them with the European Union’s requirements.