All Hong Kong QROPS Delisted By HMRC

British expats living in China as well as Chinese nationals with UK pension rights cannot now transfer their pension savings to a Hong Kong QROPS.

In total, all 19 Hong Kong-based QROPS have been delisted by HMRC and are no longer included in the authority’s list of approved schemes. For expats living in China and planning to transfer their funds to a QROPS, the delisting means they no longer qualify for an exemption and must either pay a 25 per cent transfer tax or switch the fund to a UK-based SIPP self invested personal pension.

As is usual, HMRC has given no reason for the deletion of the 19 Hong Kong QROPS, and the firms affected by the decision have made no comment as yet regarding their products’ loss of status. Hong Kong based QROPS have been established in the offshore pensions marketplace since the start of the QROPS scheme in 2006, averaging between 10 and 26 products over the past 11 years. In April this year, 22 schemes were registered, with one deleted during the month and two more taken down in October, again with no explanation from HRMC.

The Hong Kong financial market, including its QROPS, has frequently borne the brunt of speculation as regards tax avoidance and general breaking of rules, but no individual scheme has been singled out by HMRC for supposedly breaching its pension laws. Following the closure of the Hong Kong QROPS, there are now 29 offshore financial jurisdictions offering the pensions, with 16 located within the European Economic Area (EEA), and the rest set outside the European mainland.

Although no reports have come in as yet regarding the status of those whose Hong Kong QROPS have been deleted, online examples include the plight of 100 investors in the 2012-delisted Singapore-based Panthera ROSIIP scheme. After being delisted, HMRC considered their original transfers ‘unauthorised’ and billed them for up to 55 per cent of the transfer’s value as the scheme had lost its qualifying status. Some charges amounted to more than the current total value of pension pots.

The investors fought back using a group litigation order, with the final judgement in 2013 proving humiliating for HMRC as it was forced to recall the tax bills and pay investors’ legal costs.