What is a QNUPS?
We receive many enquiries from people asking us, what is a QNUPS? In this article, we will cover the main features and highlight some benefits of QNUPS.
A QNUPS is an overseas pension plan that provides expats who are retiring overseas with an alternative method to save for their retirement. QNUPS stands for Qualified Non-UK Pension Scheme and is a regulated tax-efficient pension scheme.
Although a QNUPS is a pension fund it does differ from standard UK personal pension plans and Qualifying Recognised Overseas Pension Schemes (QROPS) in that they offer a degree of investment flexibility and have some significant tax advantages that a standard personal pension does not have.
Other features of a QNUPS which may be of benefit to investors include the following:
- No tax on investment growth – This means that no Capital Gains Tax (CGT) will apply.
- No UK inheritance tax charge upon death – This makes a QNUPS a useful inheritance tax planning tool, as your nominated beneficiaries will not be subject to a tax charge when you die.
- No Lifetime Allowance Tax (LTA) charge – This allows investors to contribute and grow their retirement savings as much as possible without limits.
- Flexible Investment choices – An investor can hold assets such as property and physical silver whereas most other pension schemes would not normally offer this investment flexibility. Other assets like art or fine wine that would normally form part of ones estate can also be held within the QNUPS.
- No maximum age limit to take a QNUPS– Investors can open a QNUPS at any age and there is normally no minimum investment value.
- No maximum age to make contributions– Unlike other pension schemes in the UK there is no maximum age limit to contribute.
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QNUPS are a tax-effective way to save for retirement and shelter assets from wealth taxes on death for many expats. We would always recommend that you seek expert financial advice before considering investing into a QNUPS, to ensure that any actions you take are in your best interest.
Rules you should be aware of with QNUPS
- Employees and employers can both pay into a QNUPS but will not benefit from tax relief on the contributions.
- Tax on QNUPS benefit payments will vary depending on the tax laws of the country you reside in.
- If you transferred your UK Pension funds directly to a QNUPS this would be classed as an unauthorised payment by HMRC and a tax charge of 55% would apply to the transfer value.
- Most pension scheme death benefits are outside the member’s IHT estate. This is provided that the trustees or administrators have discretion over payment of the death benefits. However, HMRC may still treat some or all of the death benefits as falling into the member’s IHT estate if they’d made contributions to a new scheme while they were in severe ill-health and then died within two years. HMRC can then treat them as making a chargeable lifetime transfer for IHT purposes in respect of some or all the value of their death benefits.
QNUPS with IVCM
At IVCM we offer a QNUPS option in Gibraltar and New Zealand. If you would like to find out more about investing into a QNUPS, please do not hesitate to contact us and a member of our team would be happy to answer any questions you may have.
This article does not contain personal or financial advice. It is provided for general information only and does not take into account your personal objectives, financial situation or needs. IVCM is not authorized to provide you with any personal or financial advice.
If you require financial any advice then you must make sure that you obtain advice from a suitably qualified financial adviser.