Wednesday, 24 August 2011

QNUPS - Questions and Answers

·        Qualifying Non-UK Pension Schemes

·        Expatriate Tax and Pension Planning

·        UK approved by HMRC

The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010 [S1 2010/0511]

What does QNUPS stand for?
Qualifying Non UK Pension Schemes, that means that they are overseas pension schemes that meet UK tax criteria and are approved by the UK Tax Authorities (HMRC). One of their main plus points is that they are exempt from UK inheritance tax and may be available to UK residents, which means that people who may never have considered offshore investments as a way of IHT planning may be interested in the schemes.

How much do they cost?
The fees for setting up and running QNUPS are likely to be similar to those that are charged for domestic schemes. Professional fees from advisers that I recommend will be competitive and reasonable. Please contact me by email

Are they just IHT saving schemes?
It’s true that investors may be attracted at first glance to QNUPS because of their IHT exemption. However, there is more to the QNUPS than IHT efficiency. Given that some are free from the strict investment controls that apply to QROPS, some investors may find that they are preferable from the point of view of providing freedom to invest in whatever you like within a pension wrapper.

Who can put money into these schemes and how much?
Like other pension schemes, you can start investing in QNUPS while working. With no maximum age limit, you can keep on putting money into the scheme way beyond your retirement as long as you want. Your investment does not only have to be in the form of your employment income but it can be from any source and even in the form of valuables and antiques. There is no maximum limit to the investment. It is very important that you are not put off by unscrupulous ‘advisers’ who want only cash investments. Get a good adviser! Please email me

Does the protection still work if the expat returns to the UK?
Designed as an overseas pension scheme, this is a common question which comes to mind regarding QNUPS. Fortunately, even if an expat returns to the UK, the asset put into the scheme will continue to be exempt from the IHT and can be passed on to his beneficiaries tax free in the event of his death.

Can I invest existing assets into QNUPS?
QNUPS provides an excellent opportunity for in-specie transfers i.e. Investments you have built up, properties you own and other revenue producing assets can just as easily be a pension contribution. The investment does not have to be cash but cash is not excluded. Indeed the investments that can be held in a QNUPS are much less prescribed by HMRC than traditional pensions. Remember, however, that the QNUPS has to be a Pension Scheme but it is also a plan to defend assets from Inheritance Tax (IHT).

If any adviser suggests selling your assets and buying another financial structure beware. In-Specie Transfers offer a much more cost effective route, normally, and also selling assets can lead to an encashment charge or even a tax bill (eg Capital Gains Tax). To avoid this pitfall please speak to a recommended adviser. Please email me for details. Remember In-Specie Transfers.

Can I take out a QNUPS but take no income?
As the rules are less strict than other pension plans, you don’t have to take and income unless you need to.

Although for most expats a pension income is required it is not compulsory. Therefore, QNUPS can be ideal for accepting investments that you can no long contribute to, such as ISA’s. QNUPS as a capital asset are more tax efficient than ISA.

There are many more questions which can be posed and you may need to add some of your own. If you want to ask a question, request a referral to a suitably qualified adviser or just comment, please email me.

David Goodall
Financial Pages in Spain