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A Qualifying Non-UK Pension Scheme (QNUPS) is an overseas pension scheme in which cash and assets that are not eligible for UK tax relief can be contributed. QNUPS regulations were introduced by UK HM Revenue & Customs (HMRC) on 15th February 2010. The creation of the QNUPS legislation has provided significant investment and savings opportunities for British nationals, whether they are expats or still residents of the UK.
A QNUPS offers an excellent vehicle to top up the overall amount of assets and capital that needs to be set aside for a comfortable retirement, as many individuals do not have enough capital within their existing pension scheme to provide them with the level of income they will require in retirement. If you’re thinking of transferring your pension to a QNUPS, an actuary will help you establish the level of retirement benefits required to sustain your standard of living in retirement. Based on that information, a sensible funding level of contributions to the QNUPS can be settled with your financial adviser.
QNUPS can offer some great benefits, especially concerning the extraction of wealth in a tax-efficient manner, which is usually the most difficult issue to solve.
The key points of a Qualifying Non-UK Pension Scheme:
- Depending on your circumstances, it may be possible to contribute to a QNUPS after you have retired.
- The pension fund can be used by the member during his lifetime and any remaining balance can be passed on to their chosen heirs upon the member’s death.
- You do not need to have any earned income from employment in order to make a contribution.
- There is no maximum contribution that can be made into a QNUPS – as long as it is sensible to one’s standard of living. For this reason, the approval of an actuary may be needed.
As a full member of the European Union, Malta is one of the deVere Group’s preferred jurisdictions for QNUPS for a number of reasons:
- Malta has been a successful full member of EU since 2004
- Pension administrators in Malta are all fully licensed in line with HMRC requirements
- Malta has met full IFRS standards since 1997
- Malta has a reputable comprehensive, legislative and regulatory framework through the Malta
- Financial Conduct Authority.
- Malta has a sophisticated ICT infrastructure in place nationwide.
- Malta offers investor protection through a vast tax treaty network with over 59 Double Tax Treaties at the time of writing.
Furthermore, Malta is a member of the following bodies:
- International Organisation of Securities Commission
- International Association of Insurance Supervisors
- European Banking Authority
- European Insurance & Occupational Pensions Authority
- European Securities Marketing Authority
Who can benefit?
Both UK residents and non-UK residents who still maintain a UK inheritance Tax (IHT) exposure can benefit for a QNUPS.
Individuals having low retirement pot
With UK retirement rates being at near-record lows, even individuals who have a fully-funded UK pension in line with the current Lifetime Allowance limit (£1.5 million) can find that their retirement pot is not enough for them to maintain their lifestyle after they stop working. A QNUPS therefore creates an ideal vehicle to build an individual’s retirement provisions, in a way that matches their retirement income expectations.
Since QNUPS are not subject to lifetime allowance limits there will not be the same severe tax penalties that a UK resident will suffer should they fund their UK registered schemes over the lifetime allowance limit.
People who travel frequently
A QNUPS can also benefit people who travel frequently from one country to another and live and work in different locations for long periods of time. Instead of creating a pension plan that has to be funded in one country only, a QNUPS will serve as a fully international retirement plan that can be contributed to and accessed no matter where the individual resides.
Beneficiaries of the member
While both UK residents and expats creating a QNUPS should do so for retirement provisions, any funds that remain in the QNUPS on death do not attract a UK IHT charge and can be passed to beneficiaries of the member’s choice rather than being distributed in accordance with their will.