QNUPS Qualifying Non UK Pension Schemes Hong Kong

QNUPS (Qualifying Non UK Pension Schemes)

Immediately transfers money outside of your estate (No 7 year PET rules), removing any UK IHT liability on the transferred amount.

And up to 25% TAX FREE withdrawals can be made; together with an income which is paid GROSS

A QNUPS is a special “Trust” (fully HMRC approved) which imediatley removes your capital (money) outside of your estate, and as a consequece on your premature death there is no liability for UK IHT.

As monies settled into a (QNUPS) scheme are “Non-Tax relieved assets” there is no requirement for Trustee reporting to HMRC.

About QNUPS

Qualifying Non-UK Pension Schemes were introduced by HMRC through a statutory instrument which came into force on 15th February 2010.

A QNUPS is a Retirement Trust or Pension which meets specific criteria. Should all the criteria set by HMRC be met by the scheme then upon the death of the member, the fund held within the Horizon (QNUPS) will be outside of the member’s estate for Inheritance Tax purposes

The funds can then be distributed tax free by the Trustees by way of capital payments, using their powers of discretion under the provisions of the scheme rules.

The above creates significant opportunities for both UK and Non-UK residents to save local taxes in the country in which they are tax resident as well as UK Inheritance Tax.

The main benefits of a QNUPS are:

  • No limit on contributions or fund size
  • No maximum age at which you can invest into the plan
    • Benefits are available from age 55.
    • There is no requirement to purchase an annuity on retirement or at any other time.
    • Greater flexibility exits in how you can take an income from the underlying fund.
    • A maximum of 25% of the underlying fund value is available as a TAX FREE lump sum.
    • The underlying investments grow in a tax-free environment (other than dividend withholding taxes).
    • The full fund is payable free of any UK Inheritance Tax (IHT); in the event of your premature death whenever and where ever that occurs (IHT current tax rate of 40%).
    • Tax advantages and guarantees provided by offshore investments; whilst remaining under the comfort of the UK regulatory framework.
    • There are no UK income tax liabilities on received pension payments. Payments are paid GROSS of any UK income tax.
    • Greater flexibility over the nature and timing of your retirement benefits.
    • The pension fund can be denominated in a wide range of currencies to suit you (this may reduce currency risk).
    • QNUPS are exempt from the UK Lifetime Allowance (the maximum value of the underlying fund; before tax on any excess becomes liable; currently at a tax rate of 55%).
    • Wider limits on pension income levels, which can be varied to suit your individual circumstances.
    • A QNUPS removes “Your Money” from UK HMRC Pension Tax currently calculated at a tax rate of 55%.
    • A particularly flexible contract where an extensive range of investments can be made.
    • Saliently a QNUPS puts you back in control of YOUR MONEY.
  • Greater control over the investment of your underlying investment fund, with a wide range of choices available to you. This is important because, the greater the underlying fund value – all other things being equal – the larger your income will be.

A QNUPS Pension Scheme

How do QNUPS Schemes Work?

QNUPS consist of two elements:

  1. The QNUPS Trustees: the trustees are responsible for the administration of the QNUPS scheme; and to ensure that it operates within the QNUPS and HMRC rules and regulations.
  2. The QNUPS investment vehicle: this is where your underlying assets are invested.

Because of the significant opportunities for such schemes to be abused; HMRC tend to monitor these closely and penalise members and schemes for making unauthorised payments. During the first five years QNUPS providers are required to report all payments from the scheme to HMRC.

This is another reason why the correct advice and the selecting of a provider (the “Trustee”) that has a good standing with HMRC is paramount here.

With regard to the choice of investment vehicle

We provide:

  • A highly experienced investment management team with over 19 years of expertise.
  • Regular reviews on your investments; and to changes to your personal circumstances.

FAQ

What is the minimum value I can transfer to a QNUPS?

In our experience the better schemes require funding of around 75,000 GBP. Whatever your situation, contact us anyway as there is usually a solution to be found.

Will payments from my QNUPS pension fund be reported to HMRC in the UK?

No, as monies settled into a (QNUPS) scheme are “Non-Tax relieved assets” there is no requirement for Trustee reporting to HMRC.

If I transfer money into a QNUPS will I have to buy an annuity?

No, an annuity is unsuitable for a QNUPS.

Who may apply to transfer their pension into a QNUPS?

Any UK domiciled person – no matter where they live.

What investment choice and freedom will I have with a QNUPS?

The investment choice will normally be very wide indeed. Under certain circumstances you can

manage the assets yourself with total freedom, or work with an investment manager / financial adviser.

You may also appoint an investment manager to make the decisions for you or with you.

It really depends what you are looking to achieve and how involved you would like to be with the investment decisions.

We can arrange for an investment adviser to work with you by reviewing your QNUPS fund assets and make recommendations to you on a quarterly basis.

There is no limit to the size of funds that may be accumulated within a QNUPS; and a QNUPS is exempt from the UK Lifetime Allowance (the maximum value of the underlying fund; before tax on any excess becomes liable; currently at a tax rate of 55%).

How & when can I take benefits from my QNUPS?

Typically there is considerable flexibility in the timing of taking any benefits from a QNUPS. Usually benefits will be taken from the age of 55, but it can be possible to access funds before or after these ages. Please contact us for further information dependent on your circumstances.

Once I’ve transferred my money to a QNUPS can I access my fund as a 100% lump sum?

Unfortunately the answer here is ‘no’. This is because the funds that you have built up (after taking your TAX FREE lump sum) are required under the current QNUPS / HMRC rules to provide an income for you and your dependents for the rest of your life, and perhaps beyond.

How will any benefits or withdrawals be taxed?

Most of the schemes we recommend the pension income is paid GROSS (TAX FREE). The tax treatment of any income you receive will depend upon where you are tax resident at the time. (Note: we recommend you seek individual tax advice regarding your particular circumstances).

What will happen to my QNUPS pension fund upon my death?

Typically – and a major benefit of a QNUPS – is that the remaining value of the fund is paid directly to your beneficiaries. Without any liability to the UK Pension Tax at 55% or UK IHT at 40%.

I may go back to the UK in the future, can I still benefit?

Yes QNUPS are available and applicable to UK residents.

Are contributions subject to UK PET rules?

No, the 7 year rule does not apply (Appendix).

How long will a transfer to a QNUPS take?

The setting up of a QNUPS typically takes 2-3 week; this is important as once it is “In Force” all monies transferred are immediately outside your estate and as a consequence will not be liable to any IHT liabilities.

What are the key facts to look for in a good QNUPS?

Strong investor protection from a well established jurisdiction similar to the UK, investment protection, transparency of charges and tax efficiency.

My IHT Liability is substantial, what tax implications may there be?

None, a transfer to a QNUPS has no “Crystallization” tax implications.

Are there any circumstances in which I shouldn’t transfer to a QNUPS?

Yes there are. Remember once the monies are transferred to a QNUPS you can only access 25% in TAX FREE withdrawals and receive a GORSS income. The remaining monies must remain in the QNUPS.

So any money transfers into a QNUPS must be made with the above knowledge.

Can I organize a QNUPS myself?

No. QNUPS providers will only take pension transfers through their appointed intermediaries.

We are appointed intermediaries; and as such we can provide you with all of the information, and the independent financial advice that is necessary for you to make an informed choice as to whether a QNUPS is right for you.

We can also take care of all of the paperwork; making the transfer as easy as possible for you.

Conclusions – a QNUPS can “Seriously Increase Your Wealth

We trust that you can now see how a QNUPS can “Seriously Increase Your Wealth

  • QNUPS provide a substantially larger TAX FREE lump sum – to spend or invest as you wish in your life time.
  • They remove “Your Money” from the punitive UK HMRC tax regime.
  • They offer the widest possible investment options.
  • They provide GROSS Income.
  • On premature death they forward ALL remaining monies TAX FREE; and importantly outside of your remaining estate; to your dependents, for example your wife and children; or your chosen charity. This means that the money is forwarded to the right people at the right time; and that the monies remain outside of your estate with regard to HMRC calculation of any liability regarding Inheritance Tax; which is currently calculated at a TAX RATE 40%.
  • A QNUPS removes “Your Money” for UK HMRC Pension Tax currently calculated at a TAX RATE of 55%.
  • QNUPS are exempt from the UK Lifetime Allowance (the maximum value of the underlying fund; before tax on any excess becomes liable; currently at a tax rate of 55%).
  • Saliently a QNUPS puts you back in control of YOUR MONEY, pays a higher TAX FREE lump sum and reduces and eliminates your TAX LIABILITIES from HMRC.

 If you feel that you would like to find out more about QNUPS and whether they are right for you. Then why not take the opportunity to talk to the market leader in QNUPS advice. Simply call us on +852 5308 3732 – we look forward to talking with you soon.

Would you like to ask us a question or receive further information. Then please email us on our contact form, we will be pleased to answer any questions you may have.

This web page was written in 2015. For the latest information please download the latest FREE Expat British UK Pension Transfers QROPS GUIDE; QROPS information explained.

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