As a result, he predicts that UK tax authorities are now taking greater care to ensure Rops must comply with UK rules.
It follows the de-listing of thousands of Australian and Canadian schemes for failing to meet the HMRC’s pension age test, which will also to be extended from April, according to the Finance Bill.
“What we all wait to see is how HMRC will interpret regulated or regulation, where jurisdictions have different interpretations and rules.
“My personal opinion is that HMRC will also now take a further look at tax compliance in the various jurisdictions to ensure that Rops remain in line with UK rules, namely EET (exempt-contribution, exempt-growth, taxed-income).
“Allowing full “flexi-access” will come with a requirement to tax the 70% at marginal rates of income tax,” said Codrington.
However, Batty disagrees with this. He told IA that “the rules clearly state that a ROPS can be TEE (the opposite of the UK system). The practice note states that there must be some element of tax relief.”
