Qualifying Non-UK Pension Scheme (QNUPS)
For any queries you may have regarding our QNUPS pensions please look through our Frequently asked questions section
- Am I eligible for a QNUPS?
- Who might benefit from a QNUPS?
- How is the QNUPS funded?
- How much can I contribute to a QNUPS?
- Can I transfer my UK pension to a QNUPS?
- Can a QNUPS receive pension transfers from outside of the UK?
- What are the investment options?
- At what age can I access my pension?
- What form do pension benefits take?
- How will my pension benefits be taxed?
- Which QNUPS jurisdictions does Sovereign offer?
- Is financial advice required?
Am I eligible for a QNUPS?
There are no restrictions on who is eligible to establish a QNUPS subject to the discretion of the pension trustee.
Consideration must be given as to the most appropriate jurisdiction in which to establish the scheme. This will depend on the individual’s country of residence and future plans.
Who might benefit from a QNUPS?
Given the UK Inheritance tax exemption, a QNUPS is likely to be particularly attractive to UK domiciled individuals or anyone with UK property to invest in a pension scheme.
This type of arrangement may also be useful for an internationally mobile individual looking for a tax efficient retirement plan in a politically stable and safe jurisdiction.
A QNUPS could also be used where there is a limit on domestic pension contributions. The UK annual allowance for tax relieved pension contributions is currently capped at just £40,000 for 2015/16 with further restrictions for higher earners from 2016/17.
Similarly, a QNUPS offers an alternative means of funding for retirement for those who are close to exceeding the UK Lifetime Allowance (LTA) for tax relieved savings. The LTA has suffered a succession of cuts in recent years and is only £1m from April 2016.
How is the QNUPS funded?
The QNUPS is usually funded by either cash contributions or the transfer of existing assets to the plan.
How much can I contribute to a QNUPS?
There is no prescribed limit to funding a QNUPS. However, contributions should be in keeping with accepted retirement planning practice and not be excessive relative to the individual’s wealth and earnings.
Can I transfer my UK pension to a QNUPS?
In order for an offshore pension plan to receive a UK pension transfer it must hold QROPS status. A standalone QNUPS could not receive a UK pension transfer.
Can a QNUPS receive pension transfers from outside of the UK?
Yes, but only if the rules of the other pension scheme permit the transfer to the QNUPS.
What are the investment options?
This will depend on the QNUPS scheme rules. Sovereign’s Malta and Guernsey QNUPS facilitate investment into collective investment funds, cash deposits, equities, corporate and government bonds, structured products, insurance bonds and fund platforms. It is also possible to invest in more esoteric assets such as commercial and residential property though a Guernsey QNUPS.
At what age can I access my pension?
This will depend on the operating jurisdiction of the QNUPS. A Malta QNUPS allows commencement of pension benefits from age 50, whereas benefits from a Guernsey QNUPS are available from age 55.
What form do pension benefits take?
The QNUPS will usually offer a pension commencement lump sum (PCLS) of up to 30% of the value of the pension fund. The balance of the pension fund is usually applied to provide a lifetime income through a drawdown pension.
There is never any requirement to convert the pension to an insurance company annuity and the fund may remain invested throughout retirement.
How will my pension benefits be taxed?
This will depend on the QNUPS operating jurisdiction and the pension scheme member’s country of residence when pension benefits are received. Any PCLS will not be taxed at source but could be subject to tax in the recipient’s country of residence.
Which QNUPS jurisdictions does Sovereign offer?
Sovereign offers QNUPS from Guernsey and Malta.
Is financial advice required?
Yes, we recommend that any individual considering a QNUPS should take specialist advice prior to commencing the process.