Suitable countries for Qualifying Non-UK Pension Scheme (QNUPS)
A QNUPS is a pension scheme based in countries outside of the UK that qualifies for an exemption from UK Inheritance Tax (IHT). Qualifying Non UK Pension Schemes were created as a part of the Inheritance Tax Regulations 2010.
QNUPS therefore add to the armoury of potential retirement planning solutions available. They are open to UK residents, including those permanently residing in the UK, and overseas residents, including UK domiciled individuals.
In particular, QNUPS are an attractive additional retirement savings plan where individuals have reached the permitted limit of their domestic pension contributions.
QNUPS may also provide attractive pension planning for non-UK resident and non-UK domiciled individuals who may decide to move to the UK, or UK expats who may wish to return to the UK in the future.
Given the UK Inheritance tax exemption, a QNUPS is likely to be particularly attractive to UK domiciled individuals or anyone with UK property to invest in a pension scheme. This type of arrangement may also be useful for an internationally mobile individual looking for a tax efficient retirement plan in a politically stable and safe jurisdiction.
There are no restrictions on who is eligible to establish a QNUPS subject to the discretion of the pension trustee. Consideration must be given as to the most appropriate jurisdiction in which to establish the scheme. This will depend on the individual’s country of residence and future plans.
The QNUPS is usually funded by either cash contributions or the transfer of existing assets to the plan. There is no prescribed limit to funding a QNUPS. However, contributions should be in keeping with accepted retirement planning practice and not be excessive relative to the individual’s wealth and earnings.