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A QNUPS (Qualifying Non-UK Pension Scheme) is a pension scheme that allows individuals to transfer UK-based assets into an overseas-based scheme, which incurs a preferential tax rate. The requirements for a pension scheme to be defined as a QNUPS are similar to those for QROPS, but choosing which one is appropriate depends largely upon individual financial circumstances and the country in which one is domiciled and/ or resident.
With a QNUPS, the maximum age limitation for investment is removed, as well as the maximum contribution limits, meaning that a client can continue to contribute to the fund even after retirement It also allows for continued contribution even after a lump sum has been paid out, as opposed to the QROPS, which pays income directly after the lump sum has been deducted.
Unlike a UK pension scheme in which there must be a link to earned income, QNUPS have no such restrictions. All types of investable wealth, from cash investments to property, as well as antiques and fine art can be included within the scheme (subject to Trustee’s approval). Individuals wishing to place Buy-to-Let properties into their retirement plans may find a QNUPS suitable.
Tax efficiency is one of the great benefits of a QNUPS, as it offers protection from UK IHT. There are no reporting requirements to HMRC, and at death no liability to UK Inheritance Tax, regardless of your domicile. This means that funds can be used during the lifetime of the fund holder and the remaining balance can be passed on to their chosen beneficiaries upon death. At present UK IHT levels are up to 55%, so it is crucial to choose a pension arrangement that takes this into consideration and minimises its impact.