Law firm Dorsey and Whitney is planning legal action against HMRC on behalf of members facing a 55 per cent tax charge after a Singapore based Qrops was taken of the list of recognised schemes.
A letter sent to investors in the Rosiip, equity trust (Singapore) scheme says HMRC removed the Qrops from its list of recognised schemes in May 2008 after around 122 investors moved money into it.
The removal takes effect from the date the scheme was originally registered meaning any transfer from the UK into the scheme prior to May 2008 amounts to an unauthorised payment attracting a 55 per cent tax charge.
The letter claims this breeches English public law, EU law and human rights laws. The firm says it is taking group action on behalf of 12 investors.
Dorsey and Whitney partner Simon Whitehead says: “All three points come down to the same thing, that this is out of order.”
The law firm says that under EU law investors can expect legal certainty on funds moved from an EU state to one outside of the 27 nation bloc and the rules prohibit a tax authority from raising charges in these circumstances.
The letter says the listing of Rosiip by HMRC gave a “legitimate expectation” to taxpayers that they would not attract an authorised payment charge and under English law this should not be changed retrospectively.
Monfort International managing director Geraint Davies says: “HMRC do not approve schemes they recognise them when they say they will obey UK rules for life. HMRC is open about the potential for a 55 per cent charge and, though I am not a lawyer, the question is if HMRC win whether the scheme members have a case against the provider for not being a Qrops in the first place?”
HMRC refused to comment.