QNUPS HMRC Rules & Legislation
A Qualifying Non-UK Pension Scheme (QNUPS) is an overseas pension scheme in which cash and assets that are not eligible for UK tax relief can be contributed. QNUPS regulations were introduced by Her Majesty’s Revenue & Customs in 2010. The creation of the QNUPS HMRC legislation has provided significant investment and savings opportunities for British nationals, whether they are living abroad or still residents of the UK.
A QNUPS offers an excellent vehicle with which to top up the overall pot that needs to be set aside for a comfortable retirement, as many individuals do not have enough capital within their existing pension scheme to provide them with the level of income they will require in retirement.
If you are thinking of transferring your pension to a QNUPS, an actuary will help you establish the level of retirement benefits required to sustain your standard of living in retirement. Based on that information, a sensible funding level of contributions to the QNUPS can be arranged.
QNUPS can offer many benefits, especially in the extraction of wealth in a tax-efficient manner, which is usually the most difficult issue to solve.
- Depending on your circumstances, it may be possible to contribute to a QNUPS after you have retired.
- The pension fund can be used by the member during his lifetime and any remaining balance can be passed on to their chosen heirs upon the member’s death.
- You do not need to have any earned income from employment in order to make a contribution.
- There is no maximum contribution that can be made into a QNUPS – as long as it is sensible to one’s standard of living. For this reason, the approval of an actuary may be needed.
Who can benefit from a QNUPS?
Both UK residents and non-UK residents who still maintain a UK inheritance Tax (IHT) exposure can benefit for a QNUPS.
With UK retirement rates being at near-record lows, even individuals who have a fully-funded UK pension in line with the current Lifetime Allowance limit can find that their retirement pot is not enough for them to maintain their lifestyle after they stop working. A QNUPS therefore creates an ideal vehicle to build an individual’s retirement provisions, in a way that matches their retirement income expectations.
Since QNUPS are not subject to lifetime allowance limits there will not be the same severe tax penalties that a UK resident will suffer should they fund their UK registered schemes over the lifetime allowance limit.
A QNUPS can also benefit people who travel frequently from one country to another and live and work in different locations for long periods of time. Instead of creating a pension plan that has to be funded in one country only, a QNUPS will serve as a fully international retirement plan that can be contributed to and accessed no matter where the individual resides.
While both UK residents and expats creating a QNUPS should do so for retirement provisions, any funds that remain in the QNUPS on death do not attract a UK IHT charge and can be passed to beneficiaries of the member’s choice rather than being distributed in accordance with their will.
Forth Capital’s QNUPS Advice
There are a number of QNUPS providers and options available to those who wish to explore the option. However sufficient due diligence and care must be taken when considering where to invest your pension once it has been transferred into a QNUPS.
If you wish to speak to a Forth Capital QNUPS adviser, you are guaranteed to receive advice with no obligation on your part, and confidentiality is always assured. They will also give you the best advice for your unique situation and not just tell you about the benefits, but also any potential pitfalls you should consider regarding QNUPS.
As well advising on QNUPS, our advising team are equipped to help you review all areas of your financial plans and achieve your financial goals. This makes us the perfect choice for you to discuss your needs.
What happens next?
Click here or on the green speech bubble icon to the right of the screen and fill in the online form, a member of our team will then contact you to discuss your situation and objectives, they will then analyse your pensions and help you come to a decision on whether QNUPS is correct for you.