QNUPS TO THE RESCUE



David Piesing Head of Wealth Structuring, Praxis Fiduciaries Limited

 

QNUPS will be a new and unfamiliar term to many readers, but the Qualifying Non-UK Pension Scheme regime is very attractive as a supplementary or alternative pension scheme for both UK residents and expatriates. Praxis is launching the Praxis International Pension Scheme (PIPS) in Guernsey to provide retirement benefits under the QNUPS regime.

The key benefits of PIPS are:

  • no statutory restrictions on the level of contributions (but no tax relief is available in respect of contributions);
  • the fund grows free from CGT and Income Tax (except in the case of UK-source income and any irrecoverable foreign withholding taxes);
  • there are minimal restrictions on the types of investments which can be made (and investments may include residential property, private company shares);
  • loans of up to 25% of the fund may be made to the member;
  • there is no requirement to purchase an insurance annuity (the annuity or pension can be drawn directly from the fund itself);
  • a lump sum benefit of up to 25% of the fund can be taken free of UK tax;
  • the annuity or pension is subject to UK Income Tax at 90% of the member's marginal tax rate if UK resident (or is not subject to UK tax if the member is no longer UK resident); and
  • the member's fund is exempt from UK Inheritance Tax.

In order to take advantage of PIPS the member must accept that it is a bona fide pension scheme. This means that, generally, no benefits can be taken prior to attaining age 55; the member must start taking benefits on or before his 75th birthday and at least 70% of the member’s relevant scheme funds must be designated by the scheme manager for the purpose of providing the member with an income for life.

The combination of the tax advantages and flexibility of PIPS and the general QNUPS regime result in a highly attractive supplementary or alternative pension regime which is already generating huge interest from UK residents (including foreign domiciliaries who are "deemed domiciled" for Inheritance Tax purposes) and UK expatriates alike.

FOR MORE INFORMATION CONTACT:

John Bradley
Email john.bradley@praxisgroup.com
Tel +44 (0) 1481 737668

David Piesing
Email david.piesing@praxisgroup.com
Tel +44 (0) 1481 737601

David Hearse
Email david.hearse@praxisgroup.com
Tel +44 (0) 1481 737679

Anna Rhydwen-Jones
Email anna.rhydwen-jones@praxisgroup.com
Tel +44 (0) 1481 737630

Download a PIPS fact sheet

This article has been prepared as a general guide. It is not a substitute for professional advice. Neither the Praxis Group nor its directors or employees accept any responsibility for loss or damage incurred as a result of acting or refraining to act upon anything contained in or omitted from this article.