QNUPS or qualifying non UK pension schemes may be potentially beneficial for expatriates and individuals who come under the high tax bracket but it may or may not be suitable for all investors. Even the policies that define such offshore schemes are subject to different interpretations and hence you should be aware of some critical information such as its eligibility and who it is best suited for before you consider such a scheme.
Basically introduced for British expats by the HMRC, the QNUPS is no doubt continuing to gain strength. This was ideal for British expats who were not only being subjected to inheritance tax or IHT in the UK but were also being completely ripped off as they had to pay local taxes in the country of their residence as well. Although such a scheme may seem like a feasible alternative to save your potential retirement funds and investment and to avoid such huge taxes, it is equally critical to assess whether you are eligible to opt for such a scheme and whether it is the right option for you.
When it is time to plan your retirement, you need to have total clarity in your understanding of the rules pertaining to such schemes so that you don't end up paying inheritance tax charges later or other unauthorised payments. There are certain things to keep in mind if you are thinking of QNUPS. The following may be eligible for the scheme:
Individuals who live overseas and own UK private or personal pensions worth at least 60,000 pounds.
Those intending to relocate overseas in the next year or so.
Those who wish to stay out of UK for at least 5 years.
Individuals who are already living abroad for 5 years or more.
HNI UK residents.
Apart from the above, you also need to know the following regarding QNUPS:
If you have already purchased an annuity, QNUPS may not be the right option for you.
It may not be the apt one for individuals who only have a state pension or are already taking out company or employment annuity.
You need to keep in mind your risk taking ability and profile.
You also need to pay close attention to the exchange rate on transfer, the tax laws of the place of residence and the country in which you are likely to receive your annuity including the IHT rules.