HMRC Tightening Up on QROPS as Pension Liberation Moves Offshore

hmrc-540x334Under increased scrutiny from The Pensions Regulator and its affiliates, pension liberation scammers have changed tack; falsely marketing QROPS and other offshore pensions as means of accessing one’s pension pot early, a recent industry forum heard.

The news came through HMRC’s latest Pension Stakeholder Forum, and highlights how pension liberators are becoming more sophisticated in their attempts to avoid prosecution.

HMRC said “Some arrangements involve transfers to pension schemes outside the UK – HMRC are monitoring all cases, whether within or outside the UK, extremely closely and won’t hesitate to act where there is any abuse of the tax rules.”

Up until recently pension liberators had targeted savers under the age of 55, the legal age at which you can withdraw your pension barring any serious medical circumstances. However, pension firms reported to HMRC that new tactics are being employed that focus on older savers who can’t take their tax-free lump sum until they’re 65.

The Pensions Regulator reported that “we have seen a variety of different liberation models using vehicles including defined contribution, SIPPs, SSASs and overseas arrangements”, but at the forum the general industry consensus was that SSaS (small self-administered schemes) were now the most commonly targeted by liberators.

Thankfully, HMRC is reportedly considering appointing an independent professional trustee to monitor SSaS. However, the question remains: will the notoriously laborious movement of HMRC be enough to put an end to pension liberation or will the liberators just change tactic again?