As recently as February 2010, the UK government passed a regulation that allowed certain overseas pension schemes to be exempt from UK inheritance tax or IHT. These schemes are collectively referred to as QNUPS or Qualifying Non UK pension scheme. The guidelines released by the UK government to qualify for a scheme under the QNUPS are straightforward and simple:
● The pension must be based outside of the UK.
● It must be approved by the HMRC basis their own standards and criterion.
● It must not be managed and run in a country that has signed a double taxation treaty or DTA with the United Kingdom.
By definition all kinds of QROPS or will also be QNUPS. The QNUP's are available to all people above the age of 18 and help to do some retirement planning for the sunset years. This is a good scheme because it is never too late to start and moreover there is no condition like life time contributions etc. This is a holistic scheme which allows assets and collaterals like property, estates, stocks and shares which directly contribute to the fund. The fund also includes items which may not be strict money based instruments but are worthy and valuable, like precious and rate wines, jewels and antiques.
The QNUPS helps to do some intelligent tax planning around the IHT rules as they apply in the UK. This scheme is open to UK citizens who may or may not be residents in the UK but have retained their UK domicile for the purpose of inheritance taxation or IHT. When UK citizens move their residence offshore, it is not necessary that their UK domicile is relinquished too and that makes the QNUPS an attractive retirement planning option.
The scheme makes your assets work faster when they get aligned to an offshore scheme being run in a country that is not a part of the DTA agreement of the UK. This makes QNUPS a very legitimate channel to reduce or mitigate the IHT liability within UK. QNUPS are a very beneficial option since the scheme does not necessarily limit contributions to your retirement fund and neither do they put a threshold.