Posted by James Pearson on 30 Apr 2012
Qualifying Non-UK Pension Schemes (QNUPS)
On 13 February 2010 new UK legislation introduced the Qualifying Non-UK Pension Scheme or QNUPS in an attempt to clarify ambiguous aspects of the previous UK tax treatment. QNUPS are a flexible and tax efficient pension scheme that should be of great interest to individuals such as well-remunerated/executive employees and owner managed businesses who
- feel restricted by either the lifetime or annual contribution limits that apply to registered UK pensions,
- have an existing scheme or benefit trust that no longer meets their needs, or
- have substantial assets and are considering how to structure these investments to maximise growth for the future.
Unlike approved UK pensions, there are no limits on the size of contributions to a QNUPS, meaning that high earners who have already maximised their annual/lifetime contributions to registered schemes can continue to provide tax efficiently for their future.
A QNUPS is able to use contributions to invest in a wide range of assets including:
- private equity shares (including the member’s personal company)
- share options
- commercial/residential property
- intellectual property
- assets of pre-existing trusts or pension schemes
This means that the QNUPS is able to build a portfolio based on the assets that the member feels are suitable and so maximise growth. It may also, in certain situations, be able to take over management of assets held by previously established structures and pensions (such as an EBT) that are no longer suitable for the member’s needs. A QNUPS is equally flexible whether you plan to remain in the UK or perhaps intend to retire outside the UK.
Investments made by the QNUPS will be held in a tax efficient environment, free from capital gains tax on growth and with limited or no income tax on investment returns such as dividends, interest and rental income. The QNUPS is therefore better able to benefit from the investments it makes; using untaxed income and gains to build and expand its portfolio beyond what would be possible in a registered UK pension scheme.
Unlike with traditional pension schemes, members are able to access cash held by a QNUPS prior to retirement as members can take commercial loans of up to 25-30% of the fund. There is flexibility as to how the fund can be taken, meaning that income can vary from year to year to take account of changing circumstances.
A QNUPS is free from inheritance tax meaning that assets held by the QNUPS on the member’s death can pass tax-free to their children or other specified individuals.
For an initial consultation with us, please contact us on 01962 856 990 or email@example.com.
- Property Partnership Incorporation and SDLT
- Overseas Pension Changes 6 April 2017
- Top 10 tax tips for expats moving to the UK
- Overseas Workday Relief (OWR) – Relief for non-UK business travel
- Self Assessment taxation for expatriates