Following on from its co-branded QROPS proposition with Concept Group, Skandia International has also launched a co-branded QNUPS - qualifying non-UK pension scheme - also with Concept Group.
Called Aurora Quantum QNUPS, this is a Guernsey-based international retirement solution aimed at UK domiciled individuals residing outside the UK - most typical British expatriates fall under this description. The plan can be utilised as an alternative or additional pension solution with added inheritance tax benefits.
While contributions do not attract tax relief, a key advantage to using a QNUPS arrangement for clients is they can invest tax efficiently and build up a pension whilst overseas. QNUPS, a kind of cousin to QROPS, is the latest product for qualifying expats to set up an offshore pension arrangement and provided the qualifying rules aren’t broken, the scheme is exempt from UK IHT on the member’s death.
Skandia International adds that with its Aurora Quantum QNUPS there is no limit on the single and regular contributions which can be made into the scheme – though to ensure UK IHT efficiency, contributions should be kept within the spirit of ‘retirement planning’, nor does this QNUPS need the source of funding to come from employment related income. Clients can enjoy the benefits in retirement including access to up to 30% lump sum and the ability to pass on any residue of the fund to their beneficiaries upon death. Furthermore, there is no requirement to purchase an annuity and no maximum age limit for investing, meaning individuals may continue to contribute into the scheme after the age of 75.
A further advantage is that the scheme allows for both employer and employee contributions to be made, which will be attractive in a situation where the client works in a country that does not have formal pension arrangements.
Skandia International confirms that the arrangement will be offered at a one-off set up fee of £645 plus an ongoing annual fee of £845. Advisers should inform clients of additional transactional charges that may be applied for regular or ad-hoc contributions and a £2,000 fee is charged on exit within the first five years of establishment, reducing to £500 after that.
Rachael Griffin, head of financial planning and commercial development at Skandia International, comments, “The retirement planning needs of overseas investors are often complex and require specific expertise to ensure the benefits on offer are fully maximised. The availability of QNUPS extends the range of solutions available to such individuals, offering new and efficient ways to save for retirement with added benefits. For example, by utilising an overseas pension scheme which meets the QNUPS rules, investors can save in a UK IHT efficient way. Additionally, the fact that there are no formal limits on contributions into the scheme and that the investment growth is exempt from CGT can make the proposition that much more appealing."
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