Freedom Sipp’s clients are expected to be hit with a tax charge of up to £66m as a result of the decision.
The case was heard by Justice Briggs after an earlier winding up hearing on September 23 was adjourned.
HM Revenue & Customs applied to have the Sipp provider wound up due to a dispute involving outstanding VAT payments, Money Marketing understands.
It is believed that HMRC will now de-register the pension scheme, which will trigger an immediate 40 per cent tax charge on all assets.
Freedom Sipp terms and conditions state this charge would be passed to the firm’s clients. At February last year, Freedom Sipp held assets worth £165m for around 350 members.
Customers have been free to transfer their funds out of Freedom Sipp, although this has proven difficult for many.
Freedom Sipp has been closed to new business since September 2008. The FSA changed the firm’s permission in July after finding it failed to seek the right customer authorisation before moving funds and also failed to notify customers of charges deducted from their funds.
An FSA spokesman says: “The Freedom Sipp has today been wound up in the High Court on a petition issued by HMRC for non payment of tax. The FSA supported this action in line with its statutory objective to protect consumers. The FSA believes it is in the best interest of Freedom Sipp scheme members for the Freedom Sipp to be placed in the hands of a liquidator.
“Following the winding up the FSA will continue to liaise with HMRC and the liquidator. Members will still be able to request a transfer of their investments to another Sipp scheme.”
A liquidator has not yet been announced.
Hargreaves Lansdown head of pensions research Tom McPhail says: “Investors are being confronted with the possibility of losing 40 per cent of their retirement savings through no fault of their own. This, on a personal level, is just as catastrophic as many of the final salary scheme failures and Equitable Life and the like that we have seen in recent years. I hope HMRC will treat these people leniently.”
An HMRC spokeswoman says: “Our legal obligation to maintain customer confidentiality means we are unable to offer comment on the tax affairs of named individuals or organisations under any circumstances.”