Formed according to the new regulations introduced by the UK government in February, 2010, QNUPS enables expatriates to protect their assets from inheritance taxes and to pass them on to their beneficiaries without any tax cuts. Known as Qualifying Non UK Pension Scheme, qualifying here means that the schemes must meet the specific criteria of the HMRC to escape the IHT. A new concept, people are still waking up to the benefits of these overseas pension schemes. There are a lot of questions surrounding these schemes, which this article would try to answer.
How does QNUPS benefit the expats?
After retirement when a UK pension holder looks to settle down in some offshore locale, he becomes a non-resident of UK and moving his pension fund into a scheme like QROPS, he can escape the UK tax regulations. However, most expats continue to be domiciled in the UK even when they become residents of foreign countries. This makes all their assets subject to the UK IHT. A QNUPS provides protection from the UK IHT, which ensures that your heirs would inherit your asset in full. Additionally, it also provides protection from the local tax liabilities. So expats can move their entire wealth into these schemes and protect them from the UK IHT as well as local taxes.
What are the advantages of putting money into these pension schemes?
Pension schemes are designed to help people escape stringent tax regulations. The main objective of QNUPS is to protect the assets of the expats domiciled in UK from IHT, so that they can pass on their hard earned money to their future generations without any tax deductions. Further, these schemes also provide protection from local wealth taxes and succession laws of the countries in which the schemes are located. Free from the IHT as well as the local taxes, an expat can multiply his asset as much he wants and then transfer it in full to his beneficiaries.
Who can put money into these schemes and how much?
Unlike other pension schemes, you can start investing in QNUPS even while working. With no maximum age limit, you can keep on putting money into the scheme way beyond your retirement as long as you want. Your investment does not only have to be in the form of your employment income but it can be from any source and even in the form of valuables and antiques. There is no maximum limit to the investment.
Does the protection still work if the expat returns to the UK?
Designed as an overseas pension scheme, this is a common question which comes to mind regarding
QNUPS. Fortunately, even if an expat returns to the UK, the asset put into the scheme will continue to be exempt from the IHT and shall be passed on to his beneficiaries tax free in the event of his death.
