Qualifying Non-UK Pension Scheme (QNUPS)

A Qualifying Non-UK Pension Scheme is a form of overseas pension available to British citizens. If the QNUPS complies with specific HMRC regulations, it will be recognised as a QROPS. Generally a QNUPS has greater investment flexibility and can even hold property and other physical assets within the pension wrapper.

QROPS and QNUPS both have the same qualifying conditions. This in effect means that many of the guidelines governing QNUPS are similar to QROPS. As such, QROPS and QNUPS are highly similar and related pension schemes. Which one is more appropriate for an individual depends on their financial circumstances and the country in which they are domiciled and/or resident.

Typically a QNUPS would be set up by an expat who has spent many years working offshore or who plans to remain tax resident outside the UK, but is still deemed UK domicile and wants to protect his assets from UK taxation.

QNUPS Key Points

  1. A QNUPS can be entered into is you are UK resident, work in the UK or are a British expat. It may also be available to UK non-residents, depending on the rules of the scheme.
  2. A QNUPS can be held in any country. They do not need to be situated in a country that has signed a double taxation agreement with the UK. This not only means that you have a larger choice of countries that can host a QROPS but it may not be subject to reporting requirements to the HMRC.
  3. As UK pensions often receive tax breaks, there is normally a limit on the maximum amount these allowances apply to. Typically a QNUPS would not be subject to the LTA (Life Time Allowance).
  4. There is no maximum age at which you can contribute to a QNUPS.
  5. A QNUPS can, in some situations be used as a good way of mitigating inheritance tax.
  6. As with many pensions and offshore lump sum investment vehicles, a QNUPS can grow free from Capital Gains Tax.
  7. A QNUPS can hold a broad range of assets within it. This can include residential property and physical goods such as classic cars or expensive collectors items. When used in conjunction with carful Trust planning there can be some useful Inheritance Tax mitigation opportunities.
  8. A QNUPS can accept contributions not only from earned income during employment but other sources also.

Contact us if you are thinking about setting up a SIPP or already have a SIPP. We can provide more information about your options and establish any potential areas for attention.

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