On October 17, HMRC published a revised list of approved QROPS schemes, and effectively killed off the local Indian QROPS market by banning all 5 HDFC Life QROPS schemes. This news is significant, because HDFC Life was considered to be the major player in the local Indian market.
QROPS Adviser Group have been advising clients all over the world since the inception of the QROPS regime in 2006 in relation to their UK pension.
Throughout this time we have long advised clients against transferring their UK pension into a local Indian QROPS scheme – in our view, there are much better alternatives which provide all of the benefits, but without the risks. The ability to access their pension as early as the age of 35 or 40 was clearly not intended by the UK government when they established the QROPS regime. And the risks of transferring your pension to a banned QROPS are significant – the HMRC can levy a 55% tax charge against the value of the transferred funds.
It was therefore only a matter of time before Indian schemes came under the scrutiny of the HMRC.
Following on from the delisting of 15 Indian schemes in July 2014, HMRC delisted 5 schemes which were being promoted by HDFC Life. As of 15 October, HDFC Life had 5 QROPS schemes on the list of recognised QROPS, as follows: HDFC Life Guaranteed Pension Plan, HDFC Life New Immediate Annuity Plan, HDFC Life Pension Super Plus, and HDFC Life Single Premium Pension Super. None of these schemes survived the cull by HMRC.
As we highlighted earlier in the year, and again in July, when HMRC removed 15 Indian schemes, all Indian QROPS schemes are now clearly on the radar of HMRC. Other Indian schemes, especially the so called ‘immediate annuity’ plans, which allow a member to access their pension as early as 40, will surely meet the same fate as the HDFC schemes.
Need help with your UK pension transfer?
QROPS Adviser Group is currently working with a number of clients who were advised to transfer their UK pension to one of the delisted HDFC Life schemes, and are now unsure as to what to do with their pension.
If you have applied for a QROPS transfer, either from the NHS or another UK pension scheme, and are concerned that your pension will be transferred into an unauthorised scheme (thus making you liable for a 55% tax charge on your pension fund), then please contact us immediately.
We can help you contact your UK pension scheme administrator, and stop the transfer from going ahead.
Help for HDFC Advisers
We are also advising HDFC Life agents ensure that their clients receive the right advice for their UK pension transfer. This is particularly important for former NHS doctors, as the deadline to ensure that their transfer is complete before the transfer ban deadline is fast approaching.
QROPS Adviser Group can ensure that your clients will receive completely independent pension advice for their UK pension transfer. If you are an adviser for HDFC Life and would to discuss how we can help you to help your clients, please email us at email@example.com or call us on +44 7582 589561.