Your guide to… QNUPS

Tim Bush, director at Carey Pensions & Benefits Ltd, examines how Qualifying Non-UK Pension Schemes (QNUPS) could help your clients

In recent months pensions have dominated the news headlines.

The underlying theme being that the comfort zone that people of previous generations have experienced with their pension provisions is long gone and many existing schemes, and government fund pension arrangements are no longer going to provide the level of retirement support that people were expecting.

With people now having longer and healthier lives, prudence suggests that serious thought be given to maintaining a comfortable lifestyle in their retirement.
There are many opportunities for pension gap to be covered by a plethora of products from the traditional annuity scheme backed by a life assurance product to a Self Invested Pension Plan (SIPP).

There are some scenarios however, where even these arrangements may need some supplemental support.

Expatriate community

Qualifying Non-UK Pension Schemes (QNUPS) came about as a result of a Statutory Instrument introduced in 2010, and these schemes, as expected have opened up further options for the growing expatriate community, but have also provided some opportunities for UK residents/domiciles.

● For example: If an individual has a high level of earnings and wishes to contribute to a scheme an amount over and beyond the amount they can and still obtain tax relief, they could join a QNUPS where there is no ceiling of the amount they can contribute (provided the amounts are appropriate to the individuals circumstances, and are part of a bona fides pension planning scheme – so as not to incur anti-avoidance provisions). It should be noted that there is no tax relief available to any contributions made to a QNUPS.

● For example: If an individual has built up or received assets (say from an inheritance or a divorce settlement), and was relying on the benefit of these assess for their retirement, outside of a pension scheme, then a QNUPS could, if planned properly, mitigate their exposure to capital gains tax, income tax and inheritance tax. One benefit of a QNUPS is that there is no need for the contributions to come from earned income, but can come from many types of asset from investment portfolios to property to antiques.