IFAs warned of HMRC QROPS clampdown

HMRC is clamping down on qualifying recognised overseas pension scheme (QROPS) abuse through investigations by its Anti-Fraud Unit (AFU).

The news comes after various QROPS schemes were shut down in 2010,  notably the Beazley Consulting scheme last September.

An HMRC spokesperson says: "The AFU within Pension Scheme Services has been set up to counter evasion, avoidance and general abuse around pension schemes particularly targeting those who act outside the legislation.

"The unit works closely with other compliance teams within HMRC and with regulatory bodies including The Pensions Regulator (TPR) and the FSA in tackling specific cases."

Geraint Davies, managing director of Montfort International, says the investigations are long overdue.

"This is a pre-existing division set up in 2010 to investigate, amongst other matters, pension scams, sitting within the Compliance Unit. It is not specifically for QROPS, but QROPS are now taking up greater amounts of time at the Revenue," says Davies.

"The focus of investigations will be coming from all directions including behaviour of the ceding scheme, the receiving schemes and the advisers and the members.

"IFAs putting people into QROPS must understand all issues including not just UK tax consequences but the receiving country and the country where the QROPS is based. The key is compliance and the quality application of QROPS."