In February 2010 the UK government announced that certain types of overseas pension schemes were exempt from UK inheritance tax. At that moment, the QNUPS pension was born.
Prior to February 2010, there was uncertainty about the IHT issue, but QNUPS pensions are now taking off as an affordable and practical way to mitigate your estate’s IHT liability.
It used to be the case that IHT planning was something only people with castles needed to do. Now, however, UK house prices have ensured that the assets of normal families are under threat from inheritance tax, unless their owners take steps to protect them.
Unlike other IHT planning steps you may have been considering, when an asset is transferred into a QNUPS the IHT protection is immediate. Accordingly, there is no need to wait for 7 years after the transfer has been made – your heirs can rest assured that they will inherit the whole of your assets, rather than having to share them with the taxman.
But QNUPS pensions are not a one trick pony. There are other reasons to get one. For instance, your retirement savings can grow there free from Capital Gains Tax, which is a double whammy for the taxman and a double bonus for you.
A QNUPS pension may also offer a chance to avoid currency uncertainty if you live abroad by giving you the chance to “fix” assets into the currency of your choice.
Other benefits to getting a QNUPS include the fact that there are no annual or lifetime maximums, so they may be suitable for very high earners who receive substantial bonuses. At the same time, the competitive prices of fees mean that the schemes are accessible to those with a more modest pension pot.
With IHT planning, it can often be forgotten that the investor himself or herself may wish to take benefits from the pension. However, QNUPS pension designers have not forgotten this fact. As long as the rules of the scheme you have chosen allow, benefits can be taken from the age of 55. It may be possible to get a loan from your QNUPS before this, but such a move would need professional advice to make sure that you had jumped through all the necessary hoops.