Since February of 2010, there has been a new option available for people who want to mitigate their IHT liability. Qualifying Non UK Pension Schemes may be appropriate for people who are UK domiciled (and who therefore whose assets run the risk of being subject to IHT), whether they live in the United Kingdom or not.
Unlike domestic inheritance planning moves that you may take, there is no “seven year rule” for QNUPS transfers. As soon as an asset has been transferred into the scheme, there is no need to worry that the transfer may become chargeable to IHT within the next few years – it becomes exempt immediately.
Other advantages of a QNUPS include the fact that assets including residential property can be transferred, although there may be a restriction on putting your main family home into the QNUPS pot. If property sounds a little pedestrian for your investment tastes, you may be pleased to know that a wide range of asset classes are permitted, including fine wines and antiques.
Given that a QNUPS is still regarded as a pension, you will have to wait until you are 55 to withdraw anything from it. However, when you reach that birthday you could reward yourself with a lump sum of 25% of the value of your pension pot, tax free.
As with any other financial product, professional advice is essential. Not only do investors who are being advised get the best out of QNUPS providers, but they will also get help in navigating their way through the complex rules and regulations that surround foreign pensions.
Professional QNUPS advice is also essential to make sure that you do not choose a QNUPS which falls into its own country’s IHT net, as that would negate the benefit of getting one!
All in all, QNUPS are a welcome newcomer into the overseas pensions arena, and may help Brits save millions of pounds of inheritance tax.