QNUPS – Qualifying Non-UK Pension Scheme

A new UK HM Revenue & Customs (HMRC) statutory instrument came into force on 15 February 2010 providing significant opportunities for British expatriates to save on local taxes in the country in which they are tax resident, as well as on UK inheritance tax (IHT).

Authorities often rely on pension schemes to incentivise citizens to save for their retirement. These incentives may come in the form of tax efficiencies, reliefs and exemptions. This means that the overall tax rules are generally more favourable than other tax efficient structures.

QNUPS are available for both working and retired expatriates and crucially, the scheme solves different problems and offers different opportunities for both sets of people.

The problem for most retired expatriates is that they believe that their days of being able to put money into pension schemes are behind them. However, QNUPS may significantly change many retired expatriates view on this as many working expatriates often aren’t able to contribute into a tax relievable structure.

QNUPS can offer some great benefits, especially the extraction of wealth in a tax efficient manner which is usually the most difficult issue to solve.

The key points of a Qualifying Non-UK Pension Schemes:

  • There is no maximum age at which you can invest in a QNUPS.
  • You do not need to have any earned income from employment in order to make a contribution.
  • There is no maximum contribution that can be made into a QNUPS.

The rules are sufficiently flexible to allow someone who is 80 years of age and have been retired for 20 years to put large investments into a QNUPS and immediately create significant tax advantages for themselves. In addition, with a QNUPS you are entitled to take your lump sum as you would with any other pension scheme, however, you may also accumulate your fund by investing regularly into it throughout your retirement. Upon your death the remainder of your fund will be passed on to your beneficiaries free from inheritance tax.

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