QNUPS are pension schemes that give investors the opportunity to build IHT savings into their retirement planning.
Below is a brief guide to some basic information about QNUPS.
What does QNUPS mean?
QNUPS stands for Qualifying Non UK Pension Scheme. The term was brought about in February 2010 when the UK government announced that certain types of overseas pension schemes were exempt from UK inheritance tax.
The “Qualifying” part of that definition means that the overseas pension scheme must meet HMRC’s specific criteria for pension schemes that will not attract IHT. The schemes must be based overseas, and need not be in countries that have signed Double Taxation Agreements with the United Kingdom.
Who can get a QNUPS?
It’s never too soon to start planning for your retirement, and thinking about mitigating your estate’s potential IHT liability. QNUPS are typically available to over 18s only, but it is unlikely that a teenager would have given any thought to the idea!
QNUPS are available to people who are either UK resident, or resident elsewhere in the world but have retained their UK domicile status for IHT. Domicile and residence are different concepts and need to be considered in their own rights. Whilst it is fairly straightforward to change your country of residence, changing your domicile is much more difficult. Accordingly, even if you left the UK some time ago and consider yourself to have no more links to the place, you may still be domiciled there for the purposes of IHT.
What’s the point of getting a QNUPS?
QNUPS are exempt from UK inheritance tax, so their major draw is that they enable savers to pass on their assets free from death duties to their heirs.
But there are other reasons to get a QNUPS. Unlike some other pension schemes, QNUPS can accept money that has not been earned in employment. There is also no lifetime contribution for QNUPS, and nor is there any maximum age at which you can make payments into the scheme.
What can you put into a QNUPS?
The simple answer is “pretty much anything you like.” QNUPS can accept residential property and assets that are traditionally associated with retirement funding. However, they can also hold things that may not typically be linked to pensions, like fine wines and antiques.
What can you take out of a QNUPS?
As with a UK private pension scheme, you cannot typically access benefits before the age of 55. However, it may be possible before that age to get a loan from your scheme. Depending on your QNUPS’ rules, the scheme may allow access to larger and earlier tax free lump sums than a UK pension.