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QNUPS: An Overview of Jurisdictional Differences

Contributed by SIPP Specialists Limited
04 February, 2013

Contributed by SIPP Specialists Limited [www.sippspecialists.co.im]

The sole purpose of this leaflet is to highlight the jurisdictional differences that can distinguish one QNUPS Jurisdiction from another when it comes to making a choice as to which jurisdiction is suitable for a client. It is not exhaustive. If you want to research further, including QNUPS rules and legislation please visit www.sippspecialists.co.uk

In light of the recent changes to the UK Pensions regime – maximum 40k per annum contributions and maximum 1.25m lifetime allowance – QNUPS may become a viable alternative for creating a supplementary pension pot since the ability to create a meaningful pension pot at the rate of 40k per year is at best an extremely long term proposition.

It is possible that these limits could be further reduced in the future, and the upper limit to the lifetime allowance becomes ever more academic as the annual allowance is diminished.

The following factors are common amongst all jurisdictions – only the differences are highlighted under each jurisdiction.

  • Not reportable to HMRC
  • QNUPS are for contributions and typically there is no tax relief
  • No upper age limit specified for making contributions
  • No upper limit is specified for contributions or fund size
  • In specie contributions are allowable
  • 30% PCLS for non UK residents subject to age (UK residents subject to trustee)
  • No tax on surplus on death
  • Outside of UK IHT  
  • No need to purchase an annuity

Has spent two years in discussions with HMRC prior to attaining QROPS Status. They recently issued a Code of Conduct for QROPS providers there. This covers QNUPS

  • Full member of EU
  • Large number of DTA in place
  • 35% withholding tax on pension income if no DTA in place
  • Residential property and unquoted shares allowable as in-specie contributions

Has recently been given the green light by HMRC to resume QROPS business and has recently issued a Code of Conduct for its QROPS providers. This covers QNUPS

  • A member of the EU by association
  • 2.5% withholding tax on pension income
  • Flexible income withdrawal a possibility
  • Possible lending facility available
  • Early retirement options available for sportspeople for example

 Isle of Man
Recent HMRC rule changes mean that it is really only viable for IOM resident QROPS. QNUPS is still an option for non residents of IOM

  • Early retirement option for sports people for example
  • Different income withdrawal rules post age 75
  • Residential property and unquoted shares allowable as an in-specie contribution
  • Pension income paid gross to non residents of IOM

Recent HMRC rule changes mean that it is really only viable for Guernsey resident QROPS. QNUPS is still an option for non residents of Guernsey.

  • Member loans allowed
  • Pension income paid gross to non residents of Guernsey
  • Flexible income withdrawal facilities available
  • Residential property and unquoted shares allowable as an in specie contribution

This is only an overview but highlights some of the factors advisers need to take into account when considering QROPS/QNUPS jurisdictions. There are more issues.

It is important that for QNUPS professional tax advice is always taken, most particularly where the client is a UK tax resident. Whilst there are certainly tax benefits to be had the prime purpose of QNUPS is to establish a pension/supplementary pension pot, and trustees are likely to need justification especially where contributions greatly exceed UK limits

If you want to discuss this further, or want to research more, please visit www.sippspcialists.co.uk
or contact us on consultants@sippspecialists.com
SippSpecialists Limited
Oaklands Business Park,
Hooton Road,
South Wirral Cheshire    CH66 7NZ

T: 0151 328 0594   F: 0151 328 0707
e-mail: consultants@sippspecialists.com

SIPP Specialists Limited - Registered in England and Wales Registered No 4845017
Registered office: Montrose House, Clayhill Park Neston CH64 3RU
Tel: 0151 328 0594

Sipp Specialists is not regulated to give advice.  The information provided in this communication is based on our understanding of the current legislation governing pensions.


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