Non-resident pension scheme repayment claim

A German incorporated pension scheme BÄV applied to HMRC to become a qualifying recognised overseas pension scheme (QROPS). It was entitled to income from UK properties through its investment in a German real estate fund. This income would have been exempt under FA 2004 s 186 had the pension scheme been registered in the UK. The scheme claimed the exemption on the basis that the requirement to register was more onerous for a non-resident scheme and this breached the right to free movement of capital under EU law. 

HMRC refused the claim.

To become a UK registered pension fund a scheme must first qualify as a public service pension scheme. The First-tier Tribunal found that BÄV was not a public service pension fund because it had not been established by a UK legislative body. It could not therefore register in the UK. HMRC accepted that in this...