The notification list, which is released fortnightly by HMRC, contains pension schemes that have told the department that they meet conditions to be a Rops.
Unsurprising move
David White, managing director of QB Partners, says HMRC often removes schemes from the list without warning, so the Hong Kong development has not come as a surprise for industry commentators.
“HMRC have an ongoing review process whereby they look to ensure that overseas pension schemes are meeting their requirements,” White said.
“If schemes do not meet HMRC’s requirements HMRC can remove them from the list and this does happen fairly regularly,” he said.
White said schemes can be reinstated to the list once they address the shortfall in the HMRC requirements.
Common shortfall
Because all 19 schemes in Hong Kong have been removed from the list, White says this suggest that HMRC has identified a shortfall in requirements that is common across all schemes.
“One of the biggest reasons that Rops schemes in other jurisdictions have been removed from the HMRC list is because they did not meet the Pension Age Test,” White said.
This rule was brought in following the introduction of pension freedoms in the UK in 2015 and requires that all overseas pension schemes to confirm that they would not allow pension benefits to be paid before age 55.
“I do have some familiarity with Hong Kong pension schemes and as far as I am aware they have all amended their rules to state that benefits in respect of transfer from UK pensions cannot be paid before age 55, so I do not think that this will be the reason for the removal of the schemes,” he said.
If HMRC have not removed the schemes due to the pension age test, White said he could only speculate as to why HMRC had removed Hong Kong schemes from the list.
“One of the Rops requirements is that the overseas scheme must comply with local regulation so this may be a reason why the Hong Kong schemes have been removed from the list,” White said.
