QNUPS – A Guide

QNUPS A Guide

QNUPS A Guide

QNUPS is short for Qualifying Non UK Pension Scheme. This scheme commenced in February 2010 when the UK government notified that certain types of overseas pension schemes were exempt from UK inheritance tax.

"Qualifying" is defined as the overseas pension scheme that fulfills HMRC's particular criterion for pension schemes which will not attract IHT. The schemes should be based overseas, and can be in any country including those that have signed Double Taxation Agreements with the United Kingdom.

This scheme is a boon to those who are concerned with inheritance tax in the UK and want to pass on something to their heirs out of their hard earned income after their retirement.

This is a legitimate way to lessen IHT by way of investments in offshore pension schemes. It is widely available. It need not be located in countries that have signed a DTA (Double Taxation Agreement) with the United Kingdom. This means where there is no DTA there is no reporting requirements, so the scheme and attendant transactions are beyond the purview of HMRC. You also have a better choice of countries that can host a QNUPS.

Pensions usually attract tax breaks. Reliefs and exemptions on tax are given usually up to a limit on the maximum amount, QNUPS have no such limit. There is no upper age limit for contributing to this scheme. This scheme may be open to all of the non- resident UK citizens, subject to the rules of individual schemes. However IHT exemption can be availed only if you decide to return to the UK within five years.

QNUPS allow investments from assets you have acquired in any way other than earned income. Growth is exempt from CGT. This is a significant point as the government has now raised CGT rates applicable to higher rates tax payers. Assets growth free from CGT means future benefit for the family, from the capital growth of QNUPS assets fully at the time of inheritance. The HMRC will be keenly observing the contributors moves as they may be keen to swoop on those who are abusing this scheme and its attendant rules just to avoid tax liabilities as QNUPS is a tax reducing scheme. Professional advice is necessary about how to use this system most resourcefully. Without the guidance of experts, you may probably not be able to get the utmost out of this scheme.

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