subject: How To Decide Between A Qnups And A Qorps? [print this page] Both the QROPS and QNUPS have been recently introduced for the benefits of the non-resident UK and both these plans are tax saving plans.. In simple words the QNUPS plan is good because of a few major reasons, the most important being the exemption from the inheritance tax. At the same time it is very important to do the planning beforehand and once you put your pension into the scheme you will be relieved to know that your pension pot is safe. But in case of the QROPS, you are exempted from the tax only after 5years of non residency but are very attractive for protecting existing UK pension assets.
You can consider QNUPS if you are a UK expatriates or very soon deciding to be one or you already having an existing QROPS scheme. Also you can consider if you are planning to return to UK in the future. There are several benefits of the scheme, one of the most important being the non-payment of the local succession taxes upon death of the individual. This allows the individual to control who inherits how much of the income and can be taken from the age of 55 but can also be deferred until the age of 75. Most importantly you do not need to have any employment income to make the contributions. But it is to be noted that there is no tax relief on the contribution that you make.
But if you are considering the QROPS then it is mandatory that you have to report to the HMRC for the first five years which is not the case in QNUPS because of the double taxation agreements (DTA). Also there will be a tax exemption only on five years of non residency, unlike the other scheme. The QROPS are generally designed to transfer only from the existing pension schemes whereas in the other case the assets are all non-pension or investible wealth only and are not only the pension. The QNUPS rules are also somewhat more flexible than the QROPS as they allow for larger investments.
Going for the QNUPS is a better decision as far as the tax benefits are concerned when you are planning to retire offshore. The benefits from IHT make these schemes so lucrative and attractive to the non residents that they dont have any reporting obligations to the HMRC. So just choose QNUPS over QROPS and this will prove beneficial in the long run.
