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An introduction to QNUPS

Published on 23rd August, 2023

What is QNUPS? QNUPS is an overseas pension scheme introduced by the HMRC which allows the holder to avoid paying UK inheritance tax, which is currently set at 40% of the deceased’s estate value, subject to their individual nil rate band of £325,000 and private residence nil rate band of £175,000. Therefore, an individual’s estate will attract inheritance tax on anything over £500,000 with a married couple generating liability for anything over £1,000,000.

The current maximum contribution to a personal pension within the UK is a little over £1,000,000, however, there is a solution – QNUPS. These were introduced under legislation on 15th February 2010. It is a pension trust that allows you to transfer different assets into it; these being immediately exempt from UK Inheritance Tax.

Key benefits of QNUPS

• Contributions to the scheme can be from any source

• There is no maximum age for making contributions

• There is no maximum limit on how much can be paid in.

• Assets within a QNUPS will roll up without liability to tax

• Flexible levels of income can be withdrawn

• A tax-free lump sum of up to 25% of the fund can be withdrawn at age 55

• There is no liability to local taxes in the country of set up

• On death the trust assets will be exempt from Inheritance Tax, Succession Tax and Wealth Tax in many countries (particularly the UK, France and Spain)

• Income from the scheme can be structured as an annuity if the local tax rules mean that this is more tax efficient

• There is no scheme reporting by the trustees to HMRC

• 100% of the fund can be passed to heirs on death

Investment examples.

Anything that a QNUPS invests in will be paid for from taxed income because contributions into a QNUPS do not qualify for tax relief as do contributions into normal pension schemes. However, the benefit of the QNUPS is the flexibility in what it can hold as assets or invest in and the fact that any growth within it is not subject to Capital Gains Tax.

A QNUPS can hold or invest in any of the following: Quoted and Unquoted shares, UK Property – residential and commercial, Overseas property, Cash both UK and International, Cryptocurrency, Classic cars, Wine Collections, Precious metals and stones, Horses, Art Collections and Watches and Jewellery.

To find out more about this and investing in a Portugal property, contact us hello@PortugalProperty.com or call us: +351 308 800 878 or 0800 014 8201 free from the UK.

Published in: Business / Miscellaneous / News and Updates / Taxation