subject: Qnups- A Boon To Uk Expatriates [print this page] The new UK tax legislation which came into effect in February 2010 gives immense opportunities to British expats to save their UK inheritance tax as well as the local taxes in the country of their residence, if they happen to live outside of UK. Earlier, IHT was a bane to UK expats as it was difficult to escape these taxes even when they relocated abroad. The UK inheritance laws were based on domicile status and the inheritance taxes was levied on all your property worldwide. Now, the new legislation has come out with Qualifying Non UK Pension Schemes or QNUPS which offers expats shelter from inheritance taxes after their retirement while allowing them to continue investing in a pension scheme.
The main advantages of QNUPS available to expats who have lived offshore for more than 5 UK tax years are:
There is no ceiling on the maximum age limit and they can continue to invest in the qualifying scheme for as long as they want.
There is no requirement to have any earned income from an employment or service to make an investment.
Also, QNUPS does not specify any maximum contribution amount.
The qualifying non UK pension scheme is typically a trust scheme which gives you the right to take cash lump sum as well as income during your lifetime; the remaining fund can be left behind to be enjoyed by your heirs in the event of your death without having to pay any taxes. The scheme is highly tax efficient. It enables you to dodge local wealth taxes when you are alive and inheritance taxes after your death. It even lets you choose your inheritors and the manner in which your property may be divided. The expats can draw their income right from the age of 55 and in some countries, it is even paid to them tax free. This income is usually taken from the fund and the assets which are invested under the scheme are grown free of taxes. On the death of the expat, the QNUPS value will be exempt from UK inheritance tax. There are also ample investment opportunities under this scheme; right from residential property to even boats, your assets can be invested in anything and the profits may be reaped in the currency of your choice. There are also no reporting obligations to HMRC when you opt for QNUPS.
Thus, QNUPS allows retired UK expats to invest their surplus wealth in a pension scheme that not only helps them avoid IHT and local taxes but also helps transfer their estate to their heirs free of tax.
