QNUPS Explained: tax, Pensions, Inheritance Tax – all areas which can confuse and confound many of the British citizens who are resident in France. For expats who are looking to reduce tax liabilities on their estate, it may well be that QNUPS – a not so well known cousin of QROPS might be the perfect tool – here WhichOffshore offers an explanation of what the letters – and the schemes mean:
What is QNUPS?
Qualifying Non-UK Pension Scheme was established on February 2010 to provide British expatriates with a way to reduce taxes. The pension scheme is flexible and does not require payments from an employer. Expatriates can also invest at any age without a maximum contribution limit. Because of the flexibility, many expatriate retirees are gaining significant tax bonuses. Qualifying Non-UK Pension Schemes are designed for wealth preservation, and can protect people who may have had a late start saving for retirement. This QNUPS guide will explain some the benefits of participating in the pension scheme.
Advantages of Qualifying Non-UK Pension Scheme
Flexible: Retirees have the opportunity to gain significant tax bonuses. Even a 90 year old retiree could benefit from the pension scheme by investing large sums of money into an account for the tax advantages. Since there are no limits to the contribution, many retirees avoid taxes. Retirees save on wealth taxes, succession taxes and UK inheritance tax.
No Significant Rules: Many retirees can designate a beneficiary and have the funds distributed posthumously without significant rules and regulations. This is a relief to many retirees who do not want their death to be a burden on their beneficiaries.
Avoid Taxes: Many retirees have successfully avoided paying taxes in other countries by taking advantage of the Qualifying Non-UK Pension Scheme.
Early Retirement: Income can be drawn from a Qualifying Non-UK Pension scheme at the age of 55. There is no obligation to retire until the age of 75.
Tax-Free Payment: Large chunks can be paid tax-free in some regions.
Retiree Payments in the Currency of Choice: Assets and investments may be taken in any currency of choice.
Trustees Are Free From Restrictions: HMRC often imposes restrictions on retiree pensions. With the Qualifying Non-UK Pension Scheme, appointed trustees can manage a retirement account without restrictions. No reports or details will have to be supplied to governing bodies in most instances. The only exception to this rule is if transfers have been made from other UK pension plans into a Qualifying Non-UK Pension Scheme.
Access to Qualifying Recognised Overseas Pension Scheme: Retirees can have both a Qualifying Recognised Overseas Pension Scheme (QROPS) and a Qualifying Non-UK Pension Scheme. UK taxpayers living outside the UK can take advantage of this program. Even retirees that intend to move outside the UK have the opportunity to participate. If an international worker is returning to another country or to their home, he or she is also eligible to participate.
Any person that passes residency tests or pension rights tests will qualify for both managed and self-invested QROPS. This pension scheme pays upon retirement, death or if suffering from a serious illness.
Choose a Qualifying Non-UK Tax Pension Scheme:
QNUPS should be considered by people of all ages. This is an excellent way for people to plan for retirement without tax penalties. Many people take advantage of this pension scheme and use it as a tax shelter to protect their wealth. Tax-free money allows UK residents to use more of what they earned instead of paying exorbitant taxes and having a fraction of the wealth acquired.
Please note post Brexit, this information may have changed.