The ruling will have potential implications for those whose pensions were transferred into Panthera’s ROSIIP scheme, as it could mean their transfers will have been an "unauthorised payment", attracting significant UK tax liabilities, one pensions tax expert noted.
Equity Trust, the parent of Panthera and original defendant in the case, said in a statement that it "fundamentally disagree[d]" with the decision and was "extremely disappointed".
It added, in a statement: "The transfer of funds by members was only made on the basis of express representations by HMRC that ROSIIP was a QROPS. In particular HMRC issued a letter of confirmation acknowledging that ROSIPP was regarded as a QROPS at the time. HMRC also included ROSIIP on the list of QROPS on the HMRC website.
"There was no suggestion from the court that Equity Trust (Singapore) or the members acted in anything other than good faith, but unfortunately the original decision of courts stands.
"Equity Trust have vigorously opposed the decision by HMRC for more than four years but may now have no further avenues of appeal.
"HMRC will now consider what action is appropriate regarding the members of ROSIIP.
"We hope that HMRC will recognise the court’s acknowledgement of the original confirmation by HMRC of ROSIIP as a QROPS at the time of transfer."
‘inferences from limited material’
In ruling against TMF Trustees – which was drawn into the case last year after its parent, TMF Group, merged with Equity Trust – Appeal Court judge Lord Justice Lloyd admitted that the case rested on “inferences drawn from limited material put before the court in somewhat unsatisfactory circumstances”, namely having to do with whether the scheme had in fact been open to persons resident in Singapore or not.
The problem, Lord Justice Lloyd noted, was that the decision hinged on just six Singaporean ROSIIP plan members, whose Singapore resident status was, in several cases, not entirely clear.
“I do not find the matter easy because of the limited evidence; but, on a balance of probabilities, I am not satisfied that ROSIIP was indeed ‘open to Singapore residents’; and therefore I am not satisfied that Primary Condition 1 [of the 2006 regulations covering Qualifying Recognised Overseas Pension Schemes] was met,” Lord Justice Lloyd added, in a ruling with which Lord Justices Rimer and Jackson concurred.
“…It was up to the judge to decide what inferences he should draw. I can see that it might have been possible to come to a different conclusion.
“However, it seems to me that the judge’s inferences were not clearly wrong, nor was his conclusion.
“Accordingly, I would hold that the judge was entitled to decide that, despite the admission of up to six persons who gave Singapore addresses, two of whom stated Singapore as their domicile, in practical terms ROSIIP was not accessible to Singapore residents.
“I therefore agree with the judge that Primary Condition 1 was not satisfied as regards ROSIIP, and that for this additional reason, ROSIIP cannot qualify as a QROPS.”
It is not known whether TMF intends to file an appeal with the Supreme Court. The hearing on which yesterday’s ruling was based took place on 23 Jan.
As reported, a high court judge ruled against Panthera and Equity Trust last May, after the case ended up in court following a 2010 victory by Equity Trust, when it submitted a claim to the High Court to gain a declaration of ROSIIP’s legal status. At that point Equity Trust was awarded damages, and it was agreed that the case should go to trial.
Since 2008, UK pensioners have not been able to transfer their pensions to QROPS based in Singapore, and the Asian city/state does not appear on HMRC’s current list of QROPS schemes. HMRC is understood to have removed Singapore QROP schemes from its list of approved providers because it believed some were permitting illegal cash withdrawals by their QROPS clients, but some say the reason is not been fully explained, and that it may have had to do with Singapore’s way of taxing pensions.
Joint venture
Panthera, the promoter of ROSIIP, was established in 2000 as a joint venture between Equity Trust and Clariden Leu, a Credit Suisse subsidiary, and in 2006 looked to take advantage of the then-new UK legislation that paved the way for the creation of QROPS.
Panthera managing director Bethell Codrington, who has long argued that his company had right on its side and eventually would win the argument, could not immediately be reached for comment.
