*TMF Trustees Singapore Ltd v Revenue and Customs Commissioners

Page 1 Judgments *TMF Trustees Singapore Ltd v Revenue and Customs Commissioners [2012] EWCA Civ 192 CA, CIVIL DIVISION Lord Justice Lloyd, Lord Justice Rimer and Lord Justice Jackson 2 March 2012 Pension - Overseas pension schemes - Qualifying recognised overseas pension schemes - Pension scheme trustee based in Singapore - Whether scheme a qualifying recognised overseas pension scheme - Whether system for recognition of pension schemes existing in Singapore - Whether scheme open to persons resident in Singapore - Court finding scheme not qualifying scheme - Claimant trustee appealing - Whether court erring - Finance Act 2004 - Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, SI 2006/206. Judgment JUDGMENT: APPROVED BY THE COURT FOR HANDING DOWN (SUBJECT TO EDITORIAL CORREC- TIONS) LORD JUSTICE LLOYD: 1. The Claimant is the trustee of a pension scheme set up in Singapore, known as ROSIIP. The question in this appeal is whether ROSIIP is or is not a qualifying recognised overseas pension scheme (QROPS), for the purposes of the Finance Act 2004. This turns on whether ROSIIP satisfies conditions laid down in regulations made under the 2004 Act, the Pension Schemes (Categories of Country and Requirements for Overseas Pension Schemes and Recognised Overseas Pension Schemes) Regulations 2006, SI 2006 No. 206. I will refer to those as the 2006 regulations. 2. His Honour Judge Hodge Q.C., sitting as a Judge of the Chancery Division, held that the scheme did not satisfy two of the relevant conditions laid down in the 2006 regulations, and therefore that it was not a QROPS. His impressively clear and full extempore judgment has the reference [2011] EWHC 1463 (Ch). The Claimant appeals, with permission to appeal granted by the judge, against his order made on this basis on 20 May 2011. As trustee of the fund it has an interest in establishing that the fund has this favoured status. If ROSIIP is to be treated as a QROPS, then transfers can be made to it out of UK resident pension schemes, on behalf of individual contributors, without involving any financial penalty for the transferor scheme or for the contributor. If it is not a QROPS, then such penalties may be incurred. Such transfers have already been made, so it is an issue for the past and it could be for the future. 3. As before the judge, the Claimant was represented by Ms Hui Ling McCarthy and HMRC by Ms Elizabeth Wilson. Just as the judge paid tribute to both Counsel in his paragraph 61, so I express my gratitude to them both for their clear and economical submissions, in writing and in argument before us.

Page 2 4. The Claimant applied for permission to adduce additional evidence on the appeal. I will deal with that application, so far as necessary, later in this judgment. The UK legislation 5. In order to understand the issues on the appeal it is best to start with the provisions of the UK legislation, which I do by reference to the state of the Act and the regulations as they were at the time relevant to this appeal. The Finance Act 2004 set out in Part 4 extensive provisions by which the taxation of pension schemes was to be simplified. A significant part of this was provision for the registration of pension schemes with HMRC. Overseas pension schemes need not themselves be registered, but if such a scheme is a QROPS then transfers into it from a registered pension scheme are treated in the same way as transfers into another registered pension scheme. 6. At section 150 the 2004 Act has a very wide definition of "pension scheme", as follows: "(1) In this Part "pension scheme" means a scheme or other arrangements, comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of persons: (a) on retirement, (b) on death, (c) on having reached a particular age, (d) on the onset of serious ill-health or incapacity, or (e) in similar circumstances." 7. Section 150(5) has a definition of occupational pension scheme, the details of which do not matter for present purposes. Section 150(7) defines "overseas pension scheme" as: "a pension scheme (other than a registered pension scheme) which: (a) is established in a country or territory outside the United Kingdom, and (b) satisfies any requirements prescribed for the purposes of this subsection by regulations made by the Board of Inland Revenue." 8. In turn section 150(8) defines "recognised overseas pension scheme" as follows: "(8) In this Part "recognised overseas pension scheme" means an overseas pension scheme which (a) is established in a country or territory prescribed, or of a description prescribed, for the purposes of this subsection by regulations made by the Board of Inland Revenue, or (b) satisfies any requirements so prescribed." 9. Registration is provided for under Chapter 2 of Part 4. By section 153 an application may be made to HMRC for a pension scheme to be registered, containing such information as may be reasonably required and accompanied by a declaration which includes a statement that the instruments or agreements by which the scheme is constituted do not entitle any person to unauthorised benefits. On receipt of an application HMRC must decide whether or not to register the scheme, and must register it unless it appears that any accompanying information is incorrect or the declaration is false. 10. Applications to register a pension scheme may only be made (a) if the scheme is an occupational pension scheme, or (b) if the scheme has been established by an insurance company, a bank or building society or any of a number of other types of regulated bodies operating in the financial services sector or (c) if it is a public service pension scheme: section 154. 11. Payments by registered pension schemes are governed by Chapter 3 of Part 4. It is unnecessary for present purposes to consider unauthorised employer payments. Payments to or in respect of members which are authorised are governed by section 164. Relevantly these consist of (a) pensions permitted by the pension rules or the pension death benefit rules, (b) lump sum payments permitted by the lump sum rules or the lump sum death benefit rules and (c) recognised transfers. The pension rules are set out in section 165;

Page 3 they include the rule that no payment may be made before the day on which the member reaches normal minimum pension age, except in cases of ill-health. Sections 166 to 168 set out the rules for lump sums and for pensions and lump sums by way of death benefits. I do not need to set out any of the details of these provisions. 12. Section 169 deals with recognised transfers, starting as follows: "(1) A "recognised transfer" is a transfer of sums or assets held for the purposes of, or representing accrued rights under, a registered pension scheme so as to become held for the purposes of, or to represent rights under (a) another registered pension scheme, or (b) a qualifying recognised overseas pension scheme, in connection with a member of that pension scheme." 13. Section 169(2) to (7) contains provisions dealing with whether a recognised overseas pension scheme is a QROPS. Nothing turns on the details of this for present purposes. The issue is the more basic one, whether ROSIIP is an overseas pension scheme under section 150(7) at all. If it is, then it is not in dispute that it would be a recognised overseas pension scheme and, in turn, a QROPS. 14. Whether it is an overseas pension scheme depends on whether it satisfies the relevant conditions under the 2006 regulations. By virtue of regulation 2(1) the scheme must (relevantly) satisfy the requirements in paragraphs (2) and (3) of regulation 2. Both of the conditions which are at issue in this appeal are within regulation 2(3), but it is necessary to consider regulation 2(2) as well, for the context. 15. The relevant parts of regulation 2(2) are as follows: "(a) the scheme is an occupational pension scheme and there is, in the country or territory in which it is established, a body: (i) which regulates occupational pension schemes; and (ii) which regulates the scheme in question; (b) the scheme is not an occupational pension scheme and there is in the country or territory in which it is established, a body: (i) which regulates pension schemes other than occupational pension schemes; and (ii) which regulates the scheme in question; or (c) neither sub-paragraph (a) or (b) is satisfied by reason only that no such regulatory body exists in the country or territory and (i) the scheme is established in another member State, Norway, Iceland or Liechtenstein; or (ii) the scheme's rules provide that at least 70% of a member's UK tax-relieved scheme funds will be designated by the scheme manager for the purpose of providing that individual with an income for life, and the pension benefits payable to the member under the scheme (and any lump sum associated with those benefits) are payable no earlier than they would be if pension rule 1 in section 165 applied." 16. Regulation 2(3) is as follows: "This paragraph is satisfied if the scheme is recognised for tax purposes. A scheme is 'recognised for tax purposes' under the tax legislation of a country or territory in which it is established if it meets the primary conditions and also meets one of Conditions A and B. Primary condition 1 The scheme is open to persons resident in the country or territory in which it is established. Primary condition 2

Page 4 The scheme is established in a country or territory where there is a system of taxation of personal income under which tax relief is available in respect of pensions and: (a) tax relief is not available to the member on contributions made to the scheme by the individual or, if the individual is an employee, by their employer, in respect of earnings to which benefits under the scheme relate; or (b) all or most of the benefits paid by the scheme to members who are not in serious ill health are subject to taxation. For the purposes of this condition 'tax relief' includes the grant of an exemption from tax. Condition A The scheme is approved or recognised by, or registered with, the relevant tax authorities as a pension scheme in the country or territory in which it is established. Condition B If no system exists for the approval or recognition by, or registration with, relevant tax authorities of pension schemes in the country or territory in which it is established: (a) it must be resident there; and (b) its rules must provide that: (i) at least 70% of a member's UK tax-relieved scheme funds will be designated by the scheme manager for the purpose of providing the member with an income for life, and (ii) the pension benefits payable to the member under the scheme (and any lump sum associated with those benefits) must be payable no earlier than they would be if pension rule 1 in section 165 applied." 17. For the purposes of the regulations, occupational pension scheme has the same meaning as in section 150(5) of the Act. 18. Thus, a scheme must satisfy both of the Primary Conditions, and either of Condition A or Condition B. ROSIIP would not satisfy Condition A, so it must meet Condition B. Primary Condition 2 is satisfied, but there is an issue as to whether Primary Condition 1 is satisfied. The judge held that it was not, and that Condition B was also not satisfied. 19. A recognised overseas pension scheme must also satisfy the requirements of regulation 3, which include (relevantly) that it must be established in a country or territory within regulation 3(2). (I need not refer to the fall-back alternative provision.) Singapore is a relevant country because it has a double taxation treaty with the UK. 20. It seems that Singapore does not have a regulatory body for any kind of pension scheme, so that ROSI- IP's compliance with the terms of regulation 2(2) arises under paragraph 2(2)(c)(ii), because the rules and administration of the scheme satisfy the tests as regards benefits. 21. Ms McCarthy submitted that the point of the treatment given to overseas pension schemes by these provisions is that it should not be possible to pay or provide benefits out of an overseas scheme, to which a transfer had been made from a registered pension scheme in the UK, otherwise than subject to the same basic rules as apply to benefits from UK registered pension schemes. Tax relief is afforded to payments into UK registered pension schemes, and to the funds within such schemes, on the basis that the benefits to be provided by such schemes are constrained in the various ways I have described. It should not be possible to evade those constraints by a transfer into an overseas pension scheme. I accept that this is the point of these restrictions. She argued further that to construe the Conditions as she contended would not be in any way inconsistent with that statutory purpose. She may be right about that. However, the identification of the legislative objective provides only limited assistance in determining the ambit of the detailed provisions by which

Page 5 the system as regards control of transfers to overseas pension schemes is implemented, and how it works in any given case. 22. The requirement that the scheme be open to local residents is presumably intended to prevent transfers being made to schemes set up solely for the benefit of expatriates, with no real or legitimate local connection. 23. Because of the terms of Condition B, and its focus on the arrangements within the country in which the scheme is established, it is necessary to say something about the position in Singapore. Approval, recognition or registration of pension schemes in Singapore 24. There is only one relevant statutory provision in Singapore, which is section 5 of the Singapore Income Tax Act 1948 (SITA), as follows: "The Comptroller [i.e. the Comptroller of Income Tax, who acts as the Inland Revenue Authority of Singapore, IRAS] may, subject to such conditions as he may think fit to impose, approve any pension or provident fund or society for the purposes of this Act and may (without prejudice to the exercise of any power in that behalf conferred on him by any condition so imposed) at any time withdraw any approval previously given in respect of any such fund or society." 25. The judge summarised the position as follows at his paragraph 12: "According to the expert evidence, the term "pension... fund" in section 5 of SITA does not mean the same as "pension scheme" in section 150(1) of the Finance Act 2004. In effect, "pension fund", when referred to in section 5 of SITA, refers to what is understood for the purposes of UK tax legislation as being an "occupational pension scheme"; in other words, a distinct subset of the types of schemes or arrangements recognised as pension schemes in the UK. ROSIIP is not an occupational pension scheme but is rather akin to a "personal pension scheme". It is common ground between the parties that no mechanism for the approval or recognition by, or registration with, the Inland Revenue Authority of Singapore exists outside section 5 of SITA." 26. The Appellant contended that, although this one statutory provision does exist in Singapore, it does not show that there was a "system" for the purposes of Condition B, because for a system to exist there must be some sort of organised arrangement or ordered procedure. It was said as regards the position under section 5 of SITA, on the one hand, that it amounted at best to no more than an arbitrary discretion with unpublished parameters and, on the other hand, that it was in practice obsolete and not functioning. 27. I will come to the arguments about this in due course, but the context is that, since legislative changes in 1993, to set up pension funds within the ambit of section 5 of SITA has been much less attractive for commercial and economic reasons in Singapore. Most Singapore residents are best provided with pension arrangements through the Central Provident Fund of Singapore. Therefore, it is said, very few schemes now seek approval under section 5 of SITA. As it happens, one part of the additional evidence which the Appellant sought to introduce on the appeal (in this respect not opposed by HMRC) was a Guide published (online) on 15 July 2011 by IRAS about the qualifying conditions for Pension and Provident Funds to be approved under section 5 of SITA. I need not go into the detail of this, but its publication does not suggest that the possibility of obtaining approval under section 5 and the procedure for doing so was seen as a dead letter in 2011.

Page 6 28. The judge held, at his paragraph 44, that there was a system in existence, which was still operable and capable of being operated, and not a mere anachronistic relic, even if it was not used with any great frequency. That conclusion is supported rather than belied by the publication of the IRAS Guide. ROSIIP 29. The scheme which is the subject of these proceedings is called, in full, the Recognised Overseas Self Invested International Pensions Retirement Trust (Singapore). It was set up by a trust deed dated 5 March 2007. However, the terms of that deed were entirely inappropriate for the intended purpose, because they would only have fitted the needs of an occupational pension scheme. The deed was varied, with retrospective effect, by a further deed dated 2 April 2008. The combined effect of the two deeds is what matters. As such it provides for what in the UK would be termed a personal pension scheme. There is provision within it for benefits as under an occupational pension scheme, but it seems that there has never been an employer for these purposes, and that possibility can be ignored. The trust deeds are governed by the law of Singapore. 30. I need only refer to a few of the provisions of the Deed as amended. Recital D is as follows: "The Fund is open to Eligible Person to participate as member, whether they are resident in Singapore or elsewhere." 31. Eligible Person is defined, in clause 4(a) of the Deed of Variation, in a way which can be taken to include someone who has been a member of a UK pension scheme, including a personal pension scheme. 32. By clause 8(b) (as varied) the trustee has an absolute discretion whether to admit a person by way of a transfer in from another retirement fund of which the person in question was a member or beneficiary. 33. There is some evidence as to the residence of some members of ROSIIP, which was adduced only shortly before the hearing below, because the relevance of Primary Condition 1 only emerged at a late stage. I will refer to that evidence later. 34. HMRC accepted ROSIIP as being a QROPS on 16 November 2006, before it was set up, on the basis of draft documents. That recognition was withdrawn on 29 April 2008, on the basis that the application had been incorrect in stating that Condition B was satisfied. We were told that, if the withdrawal is upheld, as the judge held that it should be, then there may be other proceedings against HMRC in respect of its delay in informing the Claimant that the position was being reviewed. That is not relevant to the issues before us. Nor do I need to describe the history of the proceedings, beyond what I have already said. Condition B 35. The judge held that the existence of section 5 of SITA showed that there was in Singapore a system for the approval or recognition by, or registration with, relevant tax authorities of pension schemes. Condition B can only be satisfied if there is no such system. Therefore ROSIIP could not satisfy that Condition. Unfortunately for it, it could not satisfy Condition A because the system only allows for the approval of occupational pension schemes, which ROSIIP is not. 36. For the Claimant, Ms McCarthy argued that the judge was wrong for three reasons. First, since the local system (if any) only extended to occupational pension schemes, it could not be said that a system existed that was of any relevance to ROSIIP. Secondly, as already mentioned, what existed in Singapore did not

Page 7 amount to a "system". Thirdly, even if it was a system, approval under section 5 was for a limited purpose only, such that it did not come within Condition B. 37. The first of these is the most important point. She argued that, at its highest, a system existed in Singapore only for certain types of pension scheme, namely for occupational pension schemes. It would make no sense for ROSIIP, being a different kind of scheme, to be disqualified from having the status of an overseas pension scheme by virtue of its not being approved, recognised or registered under Singapore law, because there is no system under which it could be, so that Condition A is not satisfied, but also to be prevented from satisfying Condition B because of the existence of the very system which it necessarily could not satisfy. As she submitted, whether a pension scheme could be a QROPS would depend on the domestic policy of the particular foreign country as regards setting up a specific and targeted system of approval. If that policy extended only to a limited kind of arrangement within the broad definition of pension scheme for the purposes of the 2004 Act, then no other kind of scheme established in that country could be eligible for the status of QROPS. Moreover, local legislation could be changed, rendering the status of a scheme as a QROPS precarious and vulnerable, in unpredictable circumstances. That last point is no doubt true, to an extent, though a change in that status would not affect transfers into the QROPS which had already been made before the change. 38. One possible reading of Condition B might be that "no system exists" unless the country has a system (or systems) for the approval of all kinds of pension schemes. That could not be right. If it were, then in a country where occupational pension schemes are regulated, but other types of scheme are not, an occupational pension scheme which is not approved under that system (so not within Condition A) could be within Condition B because of the choice by that country not to regulate schemes other than occupational pension schemes. 39. The Appellant's preferred reading must be that "no system exists" for the purposes of Condition B unless there is a system which applies to the kind of scheme in question. On that basis, the existence of a system for approval of occupational pension schemes and the non-existence of a system for the approval of any other type of scheme would fit with Condition A, in that a non-approved occupational pension scheme could not satisfy Condition B, but there would be no reason why a scheme of a different kind could not do so, if the other requirements of Condition B were met. 40. The problem with this reading is that, on the one hand, Condition B is in general terms and, on the other, regulation 2(2) does draw a distinction between the regulation of occupational pension schemes and the regulation of schemes other than occupational pension schemes. It is true, as Ms McCarthy pointed out, that regulation 2(2) is concerned with the regulation of schemes whereas regulation 2(3) deals with the different topic of approval for tax purposes. By analogy, within the UK the regulatory functions referred to in regulation 2(2) are those (for occupational pension schemes) of the Pensions Regulator, whereas those dealt with in regulation 2(3) are those of HMRC. It would be possible, I dare say, for a country to have a system of regulation, for all or some kinds of pension scheme (so that either or both of regulation 2(2)(a) and (b) may be satisfied), and to have a system of taxation of personal income under which tax relief is available in respect of pensions (otherwise Primary Condition 2 could not be satisfied) but to have no system of approval for tax purposes of any kind of scheme. Singapore seems not to have any system for regulation of pension schemes, so that satisfaction of regulation 2(2) arose under paragraph 2(2)(c). It does afford tax relief for pensions in some circumstances, but it only has a limited system of tax approval, and that only applies to occupational pension schemes. 41. Despite Ms McCarthy's conspicuously able submissions, it seems to me that the judge was right to hold that the existence in the relevant country of a system of approval of a class or type of scheme within the definition of pension scheme for the purposes of the 2006 regulations means that Condition B cannot be satisfied even in respect of a scheme of a kind which cannot be approved because it is outside the scope of the relevant local system. He said at paragraph 43:

Page 8 "Condition B does not postulate that there should be a system which exists, and which applies to all pension schemes, or even to pension schemes of the kind with which the Revenue is immediately concerned. It may be that the reason for the way in which the matter has been expressed is that the legislature wished to accord respect to the autonomy and integrity of an overseas system for the approval, recognition or registration of pension schemes, and did not wish to impinge upon that. But it seems to me that that is the conclusion to which the wording adopted in the regulation leads. Subject to Miss McCarthy's other points, it does seem to me that section 5 does provide a "system for the approval, recognition or registration of pension schemes" within the meaning of Condition B, and therefore that condition is not engaged. It is common ground that Condition A is not satisfied because it cannot be; but that does not mean that there is not a system in existence, subject to Miss McCarthy's other points." 42. I agree. Condition B cannot be read as requiring there to be a system which deals with the approval (etc.) for tax purposes of all kinds of scheme which could be a pension scheme, within the meaning in section 150(1) of the 2004 Act, failing which "no system exists" under the Condition, for the reasons given at paragraph [38] above. Equally it is impossible to read it as meaning "if no system exists for the approval (etc) of pension schemes of the same kind as the scheme in question". That interpolation would do too much violence to the language. Given that regulation 2(2) does differentiate between occupational pension schemes on the one hand and schemes other than occupational pension schemes on the other, and provides separately for the existence or non-existence of a regulatory body for either of the two classes of scheme, I find it impossible to read regulation 2(3) as implicitly differentiating according to whether a fiscal approval system exists in relation to one kind of pension scheme but not another. I therefore reject Ms McCarthy's first point. With it I would also reject her third, that approval under SITA section 5 is only for limited tax purposes, since there is nothing in the condition to show that the approval etc. has to be for tax purposes generally, rather than for some particular tax purpose. 43. In my judgment, the policy of the regulation is to allow resort to the default qualification in Condition B only if the relevant foreign country has no system at all for approval, recognition or registration, for tax purposes of any kind, of any kind of pension scheme. Ms McCarthy submitted that this would produce the result that no QROPS could be established in Singapore, and that this would be surprising given the international commercial importance of Singapore, as a significant international financial centre, and its links with the UK. She also submitted that, as regards pension schemes established in other member States, this reading might result in incompatibility with EU law. That last point is one which, if it arises on given facts, can be addressed there and then. As for her previous argument, I do not accept that this is necessarily so or that, even if it is, it is so surprising. 44. In my judgment, on the one hand regulation 2(2) is designed to ensure that, if there is a local regulatory body for schemes of the relevant kind (that is to say, either occupational pension schemes or schemes other than occupational pension schemes) the scheme is regulated by that body, with the fall-back, if there is no such regulatory body, of regulation 2(2)(c). On the other hand, regulation 2(3) requires that the scheme should be open to local residents, that the local jurisdiction should afford tax relief in respect of pensions under its system for the taxation of personal income (so satisfying Primary Condition 2), and that either the particular scheme is approved (etc.) by the local tax authorities, or, although there is a relevant system of tax relief, there is no local system of any kind for the approval (etc.) of any pension schemes. A different provision, under which the criterion would be the non-existence of a system for the approval of pension schemes of the same kind as the scheme in question, might be sensible and rational, but it is not the provision that has been made by the 2006 regulations. To the contrary, if the country in question has fiscal legislation which affords approval, recognition or registration of pension schemes for tax purposes to certain types of scheme only, then the favourable treatment given to QROPS is only available for schemes of that kind, and only if the scheme in question is in fact approved, recognised or registered, as the case may be. That is consistent with recognition of local autonomy as regards fiscal privileges and respect for the terms on which such privileges are afforded locally. It is also consistent with the requirement of a real local connection which is provided for by Primary Condition 1.

Page 9 45. I am not convinced that there could not be a QROPS in Singapore in the form of an occupational pension scheme approved under section 5 of SITA, to which transfers could be made from a UK registered occupational pension scheme. I will revert to that point briefly later. 46. I also agree with the judge in rejecting Ms McCarthy's submission that the existence of section 5 of SITA does not mean that a "system exists" in Singapore, on the basis that the section does not by itself amount to a system or show that a system exists. The section exists. It may not be much used, but it is capable of being used, and there was evidence before the judge that approval had been given under the section to a few schemes in recent years. The position is all the more plain from a Tax Guide published by IRAS since the date of the judge's judgment. Even without that, the existence of the section, together with the possibility of judicial control of the Comptroller's exercise of the discretion under the section, would in my view be sufficient to show that a relevant system exists. The fact that, until recently, nothing had been published as to how applications under the section would be dealt with does not make any difference. There was evidence before the judge that IRAS' practice under the section was made known as necessary to those who might be concerned as to how to use it. 47. As mentioned, the appellant sought to introduce additional evidence on the appeal, which included the Singapore Tax Guide, published in 2011 after the date of the judgment. No objection was raised to our having regard to that guide, so I have referred to it. HMRC did object to the other additional evidence. This consisted of an expression of opinion by a Singapore lawyer about some points apparent from the Tax Guide, and a comment by KPMG on the Tax Guide by way of a Press Release. Because the Tax Guide itself was published after the date of the judge's judgment, these other materials were necessarily of later dates and could not have been put before the judge. They were, however, no more than comments on a document which seems to me to speak for itself, in the respects relevant to this case. A point relied on is that the Guide makes it clear that only employers can make contributions to funds approved under section 5. That is said to make it clear that no scheme could ever qualify as a QROPS if established in Singapore, if the judge's decision is correct. 48. I would reject the application to admit new evidence, except as regards the Tax Guide. The Press Release is not of sufficient weight to be admitted in evidence in any event. The opinion of Mr Wong about the Tax Guide does not seem to me to assist. Moreover, even in the absence of the Tax Guide, if it had been desired to test the point, it would have been possible, well before the trial, to enquire of the IRAS as to their attitude to a possible transfer into a section 5 approved fund from another pension scheme, whether approved under section 5 or not, which could, of course, be an occupational pension scheme funded by the employer. Transfers such as are referred to in section 169 of the 2004 Act are not limited to transfers from personal pension schemes. A transfer from an occupational pension scheme is a commonplace occurrence in the UK. 49. It seems to me to be an open question whether there could be a QROPS in Singapore in the form of an occupational pension scheme approved under section 5 of SITA, to which transfers could be made from a UK registered occupational pension scheme. That can and should remain undecided. Whatever the answer may be, it seems to me to have no bearing on the determination of the issues on this appeal. Primary Condition 1 50. If I am right about Condition B, then it matters not whether Primary Condition 1 is or is not satisfied. Success on that point alone could not assist the Appellant. However, I will deal with the point, though more briefly than I would if it were decisive. It is not a point of general relevance, but turns on the particular facts of the case. 51. The issue is whether ROSIIP was open to persons resident in Singapore. The Appellant starts with two good forensic points: first, recital D, set out above, states that the scheme is open to persons whether or not

Page 10 resident in Singapore, and secondly there were six members who gave addresses in Singapore in their application forms to be admitted as members of ROSIIP. Why then was the contrary view taken and upheld by the judge? 52. Singapore law includes a provision under which certain foreign trusts are exempt from Singapore income tax: Income Tax (Exemption of Income Foreign Trusts) Regulations, regulation 2A(1). This requires, among other things, that the beneficiaries of the trust may not include any person who is either a citizen of Singapore or resident in Singapore for tax purposes. 53. In February 2008, in correspondence with HMRC, the Claimant submitted material in support of its contention that ROSIIP had been correctly accepted as being a QROPS. These included a statement in July 2007 by Drew & Napier, solicitors in Singapore, as to the position of ROSIIP which said that, on the assumption that all members are not citizens of Singapore and not resident in Singapore for tax purposes, ROSIIP qualified for treatment as a foreign trust under Singapore tax law. Presumably (if it was to be of any legitimate relevance) the stated assumption was based on instructions given to the solicitors. Correspondingly, on 28 December 2007 the Claimant wrote to IRAS confirming that, for the year of assessment 2007, in claiming tax exemption on the income derived by the foreign trusts administered by it, the conditions for exemption from tax as a foreign trust were met. That letter did not itself refer to ROSIIP but the Claimant's letter to HMRC in February 2008 enclosed it and stated that the trusts in question included ROSIIP. The Claimant made similar declarations to IRAS for 2008, 2009 and 2010, in corresponding terms. 54. Marketing material in relation to ROSIIP stated that the fund was not subject to Singapore income or capital gains tax, though some of it did state that it was open to all nationalities, therefore implicitly including Singapore citizens. A checklist in the Claimant's operations manual, to be used for new applications for the transfer of funds to ROSIIP, included a box to be ticked marked "Non-Singapore residence". However, Mr Codrington, in his fourth witness statement on behalf of the Claimant, said that this was designed to inform the trustees of the number of Singapore residents that were members in case this affected the tax status of ROSIIP in Singapore so that further advice might be needed, rather than for the purpose of preventing the admission of Singapore residents. 55. Application forms for the purpose of joining ROSIIP did not contain any statement by the applicant that he or she was not a Singapore resident (or citizen). The evidence is that 6 persons (out of a total of 122 members of ROSIIP) had applied giving addresses in Singapore. Their names are redacted in the copies in evidence. Five of these six used forms which required a statement of domicile. (This may have been understood in the general sense of residence rather than the specialised sense relevant to private international law.) Two stated Singapore and three UK or England in relation to this requirement. Two of these six applicants had applied and had been accepted by the end of 2007. In at least one of these cases funds had been transferred into ROSIIP by the end of 2007. 56. Thus, the scheme was presented to the Singapore tax authorities as being a "foreign trust" under Singapore law and therefore implicitly on the basis that none of the beneficiaries was either a citizen of Singapore or resident in Singapore. In turn the marketing literature presented to the UK tax authorities and to prospective customers seems to have been prepared on the basis that it would be a foreign trust for Singapore tax purposes, and therefore not subject to Singapore tax. HMRC's contention was that the admission of six Singapore residents was a mistake, and that the trustee's policy had been not to accept Singapore residents, a policy which it was entitled to adopt, despite recital D, as an exercise of its discretion under clause 8(b)(i) of the Trust Deed. 57. After reviewing the evidence and the respective contentions, the judge set out his conclusion on this point at paragraphs 58 and 59 as follows:

Page 11 "58. I do not find the matter an easy one, because of the lack of available evidence; but, on the evidence before me, I have to ask whether the claimant has discharged the burden of proving that ROSIIP is indeed "open to Singapore residents". The whole basis upon which the trust was presented to the Singapore tax authorities is that it was a "foreign trust". The inference that I draw is that, whilst the draftsman appreciated that in order to qualify as a qualifying recognised overseas pension scheme, Primary condition 1 had to be satisfied, once the Revenue had, on 16 November 2006, granted ROSIIP qualifying recognised overseas pension scheme status, the whole focus shifted to persuading the Singapore Revenue authorities that the trust qualified for the fiscal advantages available to a foreign trust in Singapore. It may be that one or two Singapore residents may have slipped through the net; but, on the limited evidence before the court, it does seem to me that the court is justified in drawing the inference that that was by oversight or mistake. As Miss Wilson said, the claimant is a trust company; and it owed duties to protect the financial interests of the members of ROSIIP; and it would appear that it was detrimental to those financial interests for Singapore residents to be admitted. Indeed, Miss McCarthy has said that the whole Singapore tax position is now being looked at. 59. I do not find the matter easy because of the limited evidence; but, on a balance of probabilities, I am not satisfied that ROSIIP was indeed "open to Singapore residents"; and therefore I am not satisfied that Primary condition 1 was met." 58. Ms McCarthy criticised the judge's inferences that the trustee had a policy not to admit Singapore residents, and that the admission of up to 6 such residents had been by mistake. She argued that HMRC, which had raised the issue rather late in the proceedings, should have produced more evidence if it wanted to establish that the trustee had a policy of not admitting Singapore residents. Conversely Ms Wilson commented on the striking lack of any evidence from the Claimant itself as trustee as to what its policy was, which left it to the judge to come to the necessary conclusion by inference from what had happened in practice. 59. For the Claimant, Ms McCarthy also submitted that whether ROSIIP was or was not a foreign trust did not necessarily have any significant effect on it or its members, despite what the judge said at the end of paragraph 58. She pointed out that the Drew & Napier statement was correct when made, since the first of the few Singapore residents admitted as members did not come in until after that statement had been made in July 2007. On the other hand the declaration as to Singapore tax status which I have mentioned related to the whole of 2007, and although it did not in terms relate to ROSIIP, the fact that the Claimant presented it to HMRC, early in 2008, on the basis that ROSIIP was one of the trusts to which it related is a strong indication that it was understood and intended as doing so. On that basis, the statement was incorrect because, by the end of 2007 there were two members with addresses in Singapore. Both of these gave Singapore as their domicile on the form, so that the Singapore addresses were presumably not just given for convenience of correspondence, for someone with a main or only residence abroad, as may have been the case for the other four members who gave Singapore addresses. The Claimant should have been aware of this, if the checklist already mentioned was properly completed in each case. That could support an inference that the admission of Singapore residents as members was a mistake, and was contrary to the trustee's policy, and that the statement made to IRAS was made on the footing that there was such a policy and that it had been applied correctly and consistently. The Drew & Napier report also permits the inference that the solicitors were told by or on behalf of the trustee not just that there were no Singapore resident members, but that it was the policy that there should not be any such. Otherwise the report would be capable of being used in a misleading manner. 60. This is an issue of fact which depended on inferences drawn from limited material put before the court in somewhat unsatisfactory circumstances. It was up to the judge to decide what inferences he should draw. I can see that it might have been possible to come to a different conclusion. However, it seems to me that the judge's inferences were not clearly wrong, and nor was his conclusion. Accordingly, I would hold that the judge was entitled to decide that, despite the admission of up to six persons who gave Singapore addresses, two of whom stated Singapore as their domicile, in practical terms ROSIIP was not accessible to Singapore

Page 12 residents. I therefore agree with the judge that Primary Condition 1 was not satisfied as regards ROSIIP, and that for this additional reason ROSIIP cannot qualify as a QROPS. 61. It follows that I would dismiss the appeal on both grounds. LORD JUSTICE RIMER: 62. I agree. LORD JUSTICE JACKSON: 63. I also agree.