QROPS Myth #5: QROPS are ‘approved by HMRC’

HMRC do not approve anything! It is not their function.

Their purpose, as stated on the website https://www.gov.uk/government/organisations/hm-revenue-customs is:

“We are the UK’s tax, payments and customs authority, and we have a vital purpose: we collect the money that pays for the UK’s public services and help families and individuals with targeted financial support.

We do this by being impartial and increasingly effective and efficient in our administration. We help the honest majority to get their tax right and make it hard for the dishonest minority to cheat the system.”

The relevant word in the QROPS acronym here is “recognised” meaning that HMRC will recognise that an overseas pension scheme meets the criteria to be recognised as a scheme that can accept the transfer of a UK pension.

This by no means represents ‘approval’ or the suggestion that as you live outside of the UK, that you should also transfer your pension out of the UK. To make that decision, you need to either assess the situation yourself or work with an independent financial advisor who will provide you with transparent fee-based advice and not be remunerated by the pension provider that they want you to transfer your pension to.

If any advisor ever tells you that their recommendation is ‘approved’ by HMRC then it is nothing more than disguised rhetoric to appear that they are endorsed by the UK’s tax authority.

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