The customer, addressed as Mr B, asked the firm about a pension transfer into a Qrops in February 2017.
The reply came on 2 March 2017, where Scottish Widows requested the documents required to proceed with the transfer.
But, on 9 March 2017, legislation regarding Qrops came into place in the UK, stating that any transfer requested on or after that date would be due a 25% tax rate – also known as the overseas transfer charge.
Scottish Widows then asked Mr B to complete the newly introduced HM Revenue and Customs (HMRC) form.
But Mr B’s adviser contacted the insurer, as completing the form would have ended up with Mr B paying the overseas transfer charge.
At that point, Mr B filed a complaint to the FOS.
But the FOS sided with Mr B, stating that, since the transfer query was made before the legislation came into effect, he was not supposed to be charged the 25% tax rate.
“Mr B made his transfer request before 9 March 2017,” the FOS said.
“The HMRC guidance says that transfers requested before this date aren’t liable to the overseas transfer charge.
“And so, while the transfer may not have been able to proceed at that point, it wasn’t subject to the overseas transfer charge.”
The Ombudsman concluded that Scottish Widows should pay for “any applicable overseas transfer charge” and also give £100 ($121, €109) to Mr B for “the trouble the matter has caused”.