High Court rules against Singapore pension scheme

A SINGAPORE-BASED company has lost its appeal against HM Revenue & Customs decision to remove a pension scheme from its safe list. 

HMRC struck Singapore off its list of countries that individuals can transfer their pensions to without incurring tax charges in 2008. The taxman believed that Singapore was being used by many qualifying recognised overseas pension schemes (Qrops) users to bypass pensions rax rules, Citywire reported; they did this through taking out large cash lump sums after the five-year tax reporting rules had expired.

Equity Trust took HMRC to high court to declare whether its own scheme, the Panthera Recognised Overseas Self Invested International Pension (Rosiip), was lawful. The judge ruled its scheme was not open to Singapore residents, contrary to Equity Trust’s claims, as Singapore’s inland revenue believed it operated as a foreign trust and gave it tax breaks accordingly.

This ruling means that scheme members will have to pay income tax charges of up to 50% on the funds in the scheme.

The judge gave Equity Trust permission to challenge the ruling.

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