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QNUP vs QROPS | Pension Advice
Qualifying Non UK Pension Scheme (QNUPS) are actually a natural progression on from QROPS for those who wish to increase their investment options, but they benefit wealthy individuals irrespective of where they live. A QNUPS can invest in practically anything, even a residential property at the moment. Therefore your pension fund can suddenly change from being a staid old UK based pension into a life changing asset that can be utilised in multiple ways.
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Key benefits of QNUPS
One of the key benefits is the ability to purchase residential or commercial property. This allows your pension fund to purchase a property for you to either live in or let out.
Another benefit is for high earners who are unable to make fully tax relieved pension contributions in the UK due to recent legislative changes. QNUPS, we believe, will become a very attractive option for wealthier clients, as you can save large sums of money for your retirement without the constraints of UK pension legislation.
What is a QNUPS?
QNUPS stands for Qualifying Non UK Pension Scheme and it was designed for pension and income being taken outside the UK. QNUPS, correctly established with the appropriate advice, may save Inheritance Tax (IHT) for UK domiciled individuals whether they live in the UK or not.
The definition “Qualifying” means that the overseas pension scheme must meet HMRC’s specific criteria for pension schemes and this will not attract IHT (As long as the primary objective in genuine pension planning ). The schemes must be based overseas, and critically need not be in countries that have signed Double Taxation Agreements with the United Kingdom.
What is a ROPS?
Recognised Overseas Pension Scheme are essentially the same as a QNUPS, they also apply to UK residents as they are an efficient means of avoiding inheritance tax (IHT) legally, and can be used in other ways by expats in the UK, who wish to one day leave the UK and take their pension earnings with them to their home country without the tax burdens of the UK schemes. However, there are no tax breaks on putting money into ROPS.
Our Pensions advisers are the leaders in QNUPS advice, giving you the very best advice and information wherever you are in the world.
Our team of QNUPS advisers can find you the most suitable, cost effective and efficient QNUPS solution available. QNUPS Pensions team of advisers completes all the work from start to finish & removes the hassle and paper work. With our commitment to our clients, we ensure we give the very best independent advice.
Qualifying criteria for a QNUPS:
I have UK assets worth at least £650k
I have separate pension plans in place
I am a high net worth individual who requires planning
I need assistance with IHT for my family
I have not fully funded my UK pension and live in the UK
I want to invest in property or company shares
My company/occupational pension is already in drawdown?
I am still a UK resident and have no intention of moving overseas?
Independent QNUPS Advice
We are completely independent meaning we are not linked to any one QNUPS scheme, therefore we can advise on all QNUPS providers around the world. Our recommendation is based upon our extensive experience with QNUPS, knowledge of all QNUPS providers and QNUPS schemes, on-going research of new QNUPS solutions & identifying our client’s needs. We provide you with complete independent unbiased advice.
QNUPS do not have to be situated in countries that have signed a DTA (Double Taxation Agreement) with the United Kingdom.
No maximum limit for contributions or age
As QNUPS do not benefit from tax breaks on the “way in”, it means there is no maximum lifetime contributions limit. This can be a huge benefit for IHT planning.
With QNUPS, you can contribute to your scheme as long as you want to at any age. Normal pension schemes only offer tax relief and exemptions for money earned in employment. QNUPS permit contributions from assets you have acquired in any way and again there are no limits, although once the money is invested in the QNUPS fund then it follows UK pension rules for access and taxation.
Non-resident and resident members
Depending on the rules of the individual scheme, QNUPS may be available to UK non-resident members. But the IHT exempt status may not be lost if you decide to return to the United Kingdom within 5 years (compared to a QROPS).
Growth is free from taxes including CGT
The assets in QNUPS can grow free from CGT, which means that your family can eventually benefit from the capital growth of your QNUPS assets in full when they inherit them. However, please note that any assets moved into the QNUPS will have to be sold and bought leading to tax liability in your resident country at that point on both potential CGT, income and corporation tax depending on the asset.