A QNUPS is a Qualifying Non UK Pension Scheme. It was introduced as part of The Inheritance Tax (Qualifying Non UK Pension Schemes) Regulations 2010 (SI 2010 / 0051) - "The Regulations".

The QNUPS came into existence as a means to rectify a mistake made in the 2004 Finance Act. This mistake meant that money placed in QROPS would be subjected to UK inheritance tax in the event of the holders death. Now, with a QNUPS, any money transferred into the scheme will be free from all UK inheritance tax.

To set up a QNUPS you must meet the same criteria as a QROPS- the QNUPS must be set up abroad, the country in which it is set up must regulate it as a pension and recognise it in terms of tax.

QNUPS are important for:

  • UK expats who already have a QROPS.
  • Expats who are looking to return to the UK.
  • The high net worth UK resident or domiciled individual who has already utilised their maximum income tax relievable pension contributions.
  • Anyone who after 6 April 2010 will become restricted to basic rate income tax relief on UK pension contributions.

One difference that exists between the two is the lack of a need for a Double Taxation Agreement between the jurisdiction in which the QNUPS is taken and the UK if said jurisdiction is out of the European Economic Area. This is because the QNUPS does not require any reports to be made back to HMRC.

A QNUPS comes with many benefits. These include-

No restrictions on age and investing, you are allowed to continue investing money into the QNUPS after your date of retirement.

Contributions can be made from any source, not just income.

There is no limit on how much money you can invest.

QNUPS can be set so that they allow the holder to avoid any local wealth or death taxes that may be in their area.

QNUPS bypasses succession and inheritance tax, giving you total freedom over your inheritance pot and where it goes.

QNUPS and QROPS can be held in tandem and still not have reporting liabilities, as long as the QNUPS has its own assets.

Another bonus associated with the QNUPS is the freedom it gives your trustees. Providing that the QNUPS has no assets that were previously in an authorised UK pension they will be under no obligation to report any information to HMRC.

We can see that the QNUPS offers big advantages so what is the difference between itself and the QROPS? Well the main difference is that the QNUPS is exempt from UK taxes after death where as the QROPS requires five years of non-residency. The QNUPS is tailored to receive transfers from existing wealth and other non-pension assets, the QROPS is for transfers from existing pensions only. 

For any guidance on QNUPS please contact us at Ariannol.


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