Expat UK investors who had their pensions transferred into a tax scheme in Hong Kong face losing 55 per cent of their savings as HMRC has crossed the scheme off its approved list.
HM Revenue & Customs has revoked the status of the Beazley Consulting pension scheme, saying it does not meet its criteria for qualifying recognised overseas pension scheme status. Savers face a 40 per cent unauthorised payment charge and 15 per cent surcharge on the value of the transfers into Beazley.
A total of 166 expats in the Beazley scheme were invested in offshore bonds provided by Skandia’s Isle of Man division. It is not yet clear if there are other Beazley investors in bonds offered by other providers.
Documents filed with Hong Kong’s Companies House show a business called Sovereign Trust acted as corporate secretary to Beazley when it was set up while its corporate director was Grampian Managers Limited, whose ownership is uncertain.
Law firm DLA Piper has been brought in to act on behalf of Beazley.
The company is advising investors that HMRC will consider waiving the 15 per cent surcharge if investors can show that they genuinely believed they were investing in an eligible Qrops scheme.
It also says HMRC will “view sympathetically” requests not to collect the 40 per cent unauthorised payment charge.
A statement says: “The Beazley Consulting Pension Scheme was set up in 2007. At the time, Hong Kong lawyers advised that the scheme met HMRC’s criteria to qualify as a Qrops in the UK. Appropriate legal advice was taken in Hong Kong before Beazley Consulting submitted its application to HMRC which accepted that the scheme met its relevant criteria. Some 18 months later, after taking its own advice, HMRC decided that the regulations to which the scheme was subject did not meet its criteria and that the scheme no longer qualified as a Qrops.”