QROPS Reporting Rules Update 2013

Qualifying Recognised Overseas Pension Scheme (QROPS) managers will have to abide by new reporting rules in a proposed change of rules published by HM Revenue and Customs (HMRC).

HMRC has laid out the details in draft legislation and guidance.

The new rules clarify a number of administrative issues for delisted and running QROPS.

Here are the answers to some questions about the changes:

Which QROPS are affected by the new rules?

Some apply to delisted QROPS and some apply to QROPS open to transfers.

The new regulation impact QROPS that are delisted for the start of the rules – which has yet to be set.

Any already delisted schemes, such as more than 300 in Guernsey and many in New Zealand, the Isle of Man and Cyprus, are not affected by the new rules

Changes for delisted QROPS

One of the problems for HMRC has been monitoring changes and financial transactions by delisted QROPS, as no reporting framework for informing the tax man about any of these matters is in place.

The new rules make delisted QROPS scheme managers responsible for informing HMRC about:

  • Payments to fund members made by the QROPS
  • Changes to the QROPS set-up
  • Responding to information requests

A 30-day time limit is set on responding, unless HMRC has agreed otherwise.

How long do delisted QROPS have to report to HMRC?

The scheme manager must make reports to HMRC while the QROPS manages any funds transferred from a UK registered pension or the information is older than 10 years and the fund member is not UK resident, nor has been UK resident in the current tax year or any of the prior five tax years.

What happens to delisted QROPS schemes that fail to report?

The proposed law changes include a penalty scheme for failing to report to HMRC on time.

What’s new for listed QROPS?

Listed QROPS have to report their status every five years and update HMRC about any changes and other administrative matters within 30 days of the event. Failure to do so could mean the QROPS is delisted without warning.

HMRC is setting up a QROPS online website for scheme managers to notify updates.

New power for HMRC

The proposals include a clause that would allow HMRC to make inquiries about QROPS transactions that are up to 10 years old without informing the scheme manager or QROPS member.

HMRC can look back further, providing a senior tax official has signed off the request.