Is Hammond is letting pension scammers off the hook with QROPS tax?
Hammond has already done one screeching Budget U-turn. He should now do another on his wholly ill-conceived and utterly misguided thinking on QROPS.
A pensions campaign group has warned that Philip Hammond is "letting pension scammers off the hook" by targeting legitimate firms with bona fide, compliant products.
The Chancellor announced plans to introduce a 25% charge on transfers to qualifying recognised overseas pension schemes in the Spring Budget.
Angela Brooks, Chair of Pension Life, said: “Hammond has already done one screeching Budget U-turn. He should now do another on his wholly ill-conceived and utterly misguided thinking on QROPS.
“What does slapping a 25 per cent tax on QROPS transfers achieve? Primarily it disadvantages many genuine pension savers who are using bona fide, regulated advisers and who want to benefit from the advantages that transferring their UK pensions out of Britain can offer.
“What doesn’t it achieve? Stopping any of the current scammers using QROPS as the vehicle for their scams.”
Brooks added that the uncertainty over an individual's possible future domicile outside the EEA - triggering the 25% charge - has put a "large question mark" over pension and tax planning for many people.
Pension Life also criticised the Chancellor for doing "absolutely nothing to address the real problem of pension scams on British expats".
Brooks added: “The QROPS tax seems designed to collect a large basket full of low-hanging-fruit tax, but without addressing the ills of some within the offshore pension industry: namely, the armies of firms operating without regulation and the large number of trustees accepting business from them without due diligence. Hammond is also ignoring the scourge of the many toxic UCIS funds being promoted to UK residents illegally, and partnered with QROPS.
“Hammond should be preparing to work with regulators, ombudsmen and financial crime units in all the popular QROPS destinations to clean up the offshore industry in the interests of British expats - as the cost to the State of all the victims of negligent advice when they have to return to the UK and depend on benefits will be enormous.
“Hammond has ignored the multitude of issues that he ought to be addressing to protect British expats and prevent pension fraud. He is letting pension scammers off the hook by targeting legitimate firms with bona fide, compliant products.”