Qualifying Non-UK Pension Schemes (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 both on the individual’s current country of residence and their future plans.

Any individual wishing to fund a new personal pension arrangement for their retirement income can benefit from a QNUPS. Given the exemption from UK Inheritance Tax (IHT), a QNUPS may be particularly attractive to UK-domiciled individuals. A QNUPS can also be useful for an internationally mobile individual looking for a tax efficient retirement plan in a politically stable and safe jurisdiction. A QNUPS can further 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. 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.

A QNUPS is generally funded through cash contributions and / or the transfer of existing assets to the plan.

There is no prescribed limit to funding a QNUPS. However, contributions should be in keeping with accepted retirement planning practice and should not be excessive relative to the individual’s wealth and earnings.

An overseas pension plan is required to hold QROPS status to receive a UK pension transfer. A standalone QNUPS cannot therefore receive a UK pension transfer.

Yes, but only if the rules of the other pension scheme permit the transfer to the QNUPS.

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, if suitable advice is received, to invest in more esoteric assets such as commercial and residential property.

As the trustee of your QNUPS, Sovereign is responsible for investment governance arrangements of your scheme, including determining an appropriate investment strategy and ensuring that it adheres to the investment provisions of your scheme’s governing documents.

Your investment strategy, setting out how the assets are to be invested, is one of the most important drivers of your scheme’s ability to meet its fundamental objective of providing pension benefits as they fall due over the life of the scheme. You need to take an appropriate amount of investment risk to seek the return needed, to understand the overall level of investment risk in your scheme and to manage that risk effectively.

Each member must nominate an Investment Adviser and/or Investment Manager that can make investment recommendations to the trustee. The trustee will take account of the investment objective and purpose of the scheme and ensure compliance with any applicable investment restrictions as imposed by the relevant governing law and the risk profile of the member.

As trustee, our investment proposition is to provide our clients with investment options from our researched list of Investment Providers, which we monitor on an ongoing basis to ensure they remain appropriate for our clients. We will also monitor the costs involved with the management of your scheme assets with to ensure that they continue to represent good value.

This will depend on the operating jurisdiction of the QNUPS. A Malta QNUPS may allow commencement of pension benefits from the age of 50, while benefits from a Guernsey QNUPS are not available until the age of 55.

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 then generally applied to provide a lifetime income through a drawdown pension. There is no requirement to convert the pension to an insurance company annuity and the fund may remain invested throughout retirement.

This will depend on the operating jurisdiction of the QNUPS and the country of residence of the pension scheme member when pension benefits are received. Any PCLS will not be taxed at source but may be subject to tax in the recipient’s country of residence.

Sovereign offers QNUPS from Guernsey and Malta.

Yes. Sovereign recommends that any individual considering a QNUPS should take specialist advice prior to commencing the application process. Sovereign requires that any UK tax resident or UK domiciled individual takes suitable UK tax advice, which must be submitted to the trustee with any application for a QNUPS.