Inheritance Tax, QNUPS

QNUPS Rules 2016 | Triple Tax Protection for British Expats


QNUPS Rules 2016 | Triple Tax Protection

QNUPS Rules 2016 – A Hong Kong QNUPS can protect your retirement income from Capital Gains Tax (CGT), Inheritance Tax (IHT) and Income Tax if you retire abroad to one of these 26 countries: Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Qatar, South Africa, South Korea, Switzerland, Thailand, UAE and Vietnam

For other countries worldwide, a QNUPS can protect you from CGT and IHT, but you pay local income tax on your pension in your country of residence at retirement.

qnups rules

QNUPS Explained | Tax benefits for UK residents and British expats

All QNUPS avoid both UK Capital Gains Tax (CGT) and Inheritance Tax (IHT). There is no income tax at source for a QNUPS. QNUPS are available in the Isle of Man, Guernsey, New Zealand, Malta, Gibraltar and Hong Kong.

But, only Hong Kong has strong Double Taxation Agreements which often gives the income taxation rights to Hong Kong and income tax in Hong Kong on a QNUPS is zero.

But, you need to move abroad to one of these 26 countries in retirement in order to pay zero tax:

Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Qatar, South Africa, South Korea, Switzerland, Thailand, UAE and Vietnam

Under UK legislation introduced in 2004, effective from 6 April 2010, UK resident individuals are entitled to transfer their non-UK pension assets to a Qualifying Non UK Pension Scheme (QNUPS) within the meaning of the
Inheritance Tax Act. QNUPS are open to UK residents, including those permanently residing in the UK, and
overseas residents.

On moving abroad many British expatriates will still have an exposure to UK inheritance tax on their estate as they
will be considered by HMRC as domiciled in the UK. Domicile is not the same as residence and is not easily changed.

The exposure to UK inheritance tax can continue many years after a person ceases to live in the UK.

QNUPS may also provide attractive pension planning for non-UK resident and non-UK domiciled individuals who
may decide to move to the UK.

In theory there is no limit on the amount that can be contributed into a QNUPS. However the amount of the contribution should be no more than is sufficient to provide the member with a retirement income. Ideally the level of contribution(s) should be determined by independent actuarial advice. Contributions to QNUPS do not attract UK tax relief.

Therefore they are likely to be attractive to higher level taxpayers given that tax relief on contributions to UK registered schemes is now tightly capped.

QNUPS Rules in Hong Kong

  • Can draw retirement benefits from age 55
  • 25% tax-free cash lump sum at age 55
  • No tax on growth or death
  • No income tax if in one of 26 countries; otherwise pay income tax in your country of residence
  • Choice of investments in shares, ETFs, mutual funds, unit trusts, property funds, etc
  • Choice of currency
  • Name your heirs; 100% goes to named beneficiaries on death
  • Must be employed or self employed to set up a HK QNUPS

QNUPS Rules in New Zealand

  • Can draw retirement benefits from age 55
  • 30% tax-free cash lump sum at age 55
  • No tax on growth or death
  • No income tax in NZ; pay income tax in your country of residence
  • Pooled investments that are discretionary managed
  • Choice of currency
  • Name your heirs; 100% goes to named beneficiaries on death

QNUPS Rules in the Isle of Man

  • Can draw retirement benefits from age 55
  • 30% tax-free cash lump sum at age 55
  • No tax on growth or death
  • No income tax in the Isle of Man; pay income tax in your country of residence
  • Choice of investments in shares, ETFs, mutual funds, unit trusts, property funds, etc
  • Choice of currency
  • Name your heirs; 100% goes to named beneficiaries on death

QNUPS Rules in Guernsey

  • Can draw retirement benefits from age 55
  • 30% tax-free cash lump sum at age 55
  • No tax on growth or death
  • No income tax in Guernsey; pay income tax in your country of residence
  • Choice of investments in shares, ETFs, mutual funds, unit trusts, property funds, etc
  • Choice of currency
  • Name your heirs; 100% goes to named beneficiaries on death
  • Annuity available if required

This QNUPS can also be used to purchase a residential property unlike a QROPS. You can see our full QNUPS Guide for 2016 here.

QNUPS Rules 2016 article by QROPS Specialists

QNUPS Rules 2016 | Triple Tax Protection for British Expats by

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