Pesions shock

A retired couple in their 70’s – one of whom suffers from Parkinson’s disease - will now have to cough up thousands of pounds to HMRC after landing a huge tax interest bill for transferring their retirement funds to Guernsey to avoid UK tax laws.

Neil and Megan Gretton, dubbed ‘honest and compliant taxpayers’ by the First Tier Tax Tribunal which heard the case, were advised to shift two of their Scottish Equitable pensions – worth £231,000 - to Guernsey in 1996 by pension adviser Knightsbridge Associates.

The couple was told that the scheme would enable them to avoid purchasing an annuity and allow them to hand their pension funds on to their children when they died.

But HMRC successfully argued that the transfers were invalid because the couple had not permanently moved to Guernsey, only leased a property there for three months, which they were advised would be sufficient.

While the Grettons said they moved the money in good faith and Knightsbridge Associates was cleared of any wrongdoing, HMRC won its case in 2010, forcing the couple to pay back £86,000 in unpaid tax.

And in the latest twist, a new court case has ruled that the couple must also now pay interest on the £86,000 going back to 1996 as well as the tax charges. This is likely to wipe out most of their pension pots.

The scheme the Grettons transferred their pensions into was the brainchild of convicted fraudster, Malcolm Tune, who was arrested in 2009 and sentenced to five years for running a £2.5 million fraudulent tax scheme. In 2005, Tune left his wife and five children to skip bail and head for South-East Asia.

He was finally tracked down to Ireland before being returned to Britain and jailed.

Tune again gained notoriety in 2007 after being accused of conning disabled people by selling them the £4,000 Powertrike device through Tune’s company PDQ Mobility, which turned wheelchairs into powerful trikes. The Powertrike device was flawed and described by a judge as ‘inherently dangerous’ after several occasions where the trikes became unstoppable.

The judge also described Tune – once a lay reader, church choir member and auditor of the local Scout group and horticultural society in the village of Orwell, Cambs, as ‘a nasty piece of work’ for refusing to provide refunds to unhappy customers.