Tax Rebates & Refunds

Tax warning over ex-pat pension schemes

September 27, 2012
Posted in Other Tax — Written by Jennifer

According to a report in the Telegraph, the HMRC has started to clamp down on Qualifying Recognised Overseas Pension Schemes (QROPS), which many British ex-pats have used to transfer their pensions overseas.

Due to the department’s action on QROPS schemes, some British ex-pats have now started to turn to Qualifying Non-UK Pension Schemes (QNUPS). These schemes don’t offer the same benefits, except that they help ex-pats to plan for retirement and they are also exempt from inheritance tax, but they have so far slipped under the HMRC radar.

However, experts are now warning that the tax authorities could start to take notice of such pension schemes as such an influx of people using the plans sets HMRC alarm bells ringing. The main worry is that some members of the scheme could start to abuse rules relating to inheritance tax.

The managing director of Concept Group, Rob Shipman, said:

“There are dangers for any advisor who suggests to their clients that the sole purpose of the pension is simply to avoid UK inheritance tax. HMRC will take a dim view of this.”

The HMRC has recently announced that due to its use of advanced new technology, it has managed to secure its own kind of tax refund from people who have previously avoided paying their share of inheritance tax.

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