Qnups Tax Benefits
The reason for the launch of QNUPS in February 2010 is due to failure of the taxman
in the previous legislation, QROPS, which failed to provide guidelines about the UK IHT or Inheritance Tax exemption.
Initially, when the UK government launched the legislative framework for pension simplification, which came in 2006, they failed to notice that some Offshore Pension Investment schemes were already enjoying UK IHT or Inheritance Tax exemptions. This uncertainty about the Tax structure and its exemption were really confusing until the Offshore Pension Investment scheme called QNUPS came into force. Introduction of QNUPS was a major milestone and it laid the rules and regulation regarding the Tax exemption policies.
In 2010, the treasury or the HMRC made it clear that QNUPS is exempted from UK Inheritance Tax. People opted for QROPS previously to get income tax exemption, but Qualifying Non UK Pension Schemes is different and much wider in terms of definition than QROPS and other overseas retirement schemes.
QNUPS unlike QROPS doesnt need a DTA or Double Taxation Agreement to be signed between the destination country and the UK. This implies that the scheme is free from any reporting with the UK HMRC. However, in certain countries there is a TIEAs or Tax Information Exchange Agreements which enables the authorities or taxman to share investment information of clients to find out any fraudulent activity. Unlike certain inheritance tax saving retirement schemes, it provides protection of funds from IHT as soon as the cash or asset contribution gets transferred.
In the event of any worst case scenario right after the setting up of the scheme, the heirs or nominees of the funds or assets can take it out without doing any death duty. This is a striking difference between this scheme and some other overseas schemes that are in operation in the market because in other schemes the fund is only safe and secure from inheritance tax but that too after seven years from the date of setting up the fund.
QNUPS is devoid of any CGT and it grows free from any other taxes. This is what makes it special if we consider the rise in the tax rates recently. If you have any doubt or want to gather information about the implications of foreign taxes then an adviser might help you out in this matter. It is available in various countries but it is most potent especially in countries which have neutral tax structure.
by: QROPS
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