The legal battle, which saw HMRC withdraw and cancel any tax demands, was based on the fact that investors who transferred their UK pensions to a Singapore-based QROPS called ROSIIP in between 2006 and 2008 was based on the fact that, at the time of the transfers, the QROPS was still on the HMRC authorised list.

The subsequent ‘delisting’ of the scheme which made transfers unauthorised and subject to a 55% tax levy was therefore unfair.

The HMRC climbdown has been hailed today as a “victory for common sense” by Nigel Green, the founder and chief executive of the deVere Group. 
 
Commenting on the decision, Green said: “HMRC has made the correct and fair decision to abandon this case.  It would have been inappropriate to pursue it after individuals were led to believe that this particular QROPS was authorised by the tax authority, subsequently invested in it, only later to discover it had been delisted and taxes of 55% had been applied.”

QROPS, launched in April 2006, are HMRC-recognised overseas pensions and are typically used by UK residents who live outside Britain. With QROPS not having to be established in the new country of residence, they can offer greater tax efficiency, flexibility and stability, amongst other benefits.

However, commentators are now expecting that the HMRC defeat will herald a further tightening up on QROPS rules.