subject: QROPS & QNUPS - What's The Difference? [print this page] QROPS & QNUPS - What's The Difference? QROPS & QNUPS - What's The Difference?
QNUPS came into effect on February 15th 2010 when they were introduced by the UK government. They are a large conglomeration of offshore pension schemes or retirement plans which not only meet the standards of Her Majesty's Revenue and Customs but are also exempt from inheritance tax. These schemes enable pension holders to avoid inheritance tax in such an effective way that will see your beneficiaries inherit your assets without ever encountering the taxman. This is especially useful for expatriates who wish to enjoy their expatriate pension in peace when they later on return to live in the UK.
QROPS may only operate in country jurisdictions which have signed double taxation treaties with the UK, and are as such required to report back on the activities of the particular retirement scheme. Both QROPS and QNUPS are subject to IHT or inheritance tax. However, unlike the QROPS, QNUPS are not subject to stringent report back rules as investors are allowed to place their funds into residential properties as long as they don't include their own homes into the scheme. QROPS are available to pension holders residing outside the UK, while QNUPS are available to investors residing within the United Kingdom. In order for a QROPS to qualify and form a part of a QNUPS, it must however meet very strict criteria. QNUPS are therefore lucrative investments for those residing in the UK who wish to invest in property.
In short, QROPS are individual foreign retirement schemes which form a part of the QNUPS; and both QROPS and QNUPS are ideal in obtaining tax exemption. However, while QROPS involves double taxation, QNUPS does not. Generally speaking, the investment rules pertaining to QNUPS are much more flexible than those relating to QROPS. With QNUPS you receive relief from taxes after you die, but with QROPS you would have to be a non-UK resident for the five complete tax years in order to enjoy the accruing benefits.
