If you are considering QNUPS scheme for transferring funds offshore then there are certain things that you should know beforehand.
QNUPS is a relatively new concept and so people might have many questions about it.
Even though it is difficult to identify very specific questions pertaining to an individual's situation while applying for a new Offshore Pension scheme, there are certain questions related to tax, investment and inheritance tax, which can be discussed in the common terms.
The QNUPS or the "Qualifying Non UK Pension Schemes" have been launched recently, but they have already become a huge hit for providing customers with numerous tax benefits and lucrative investment plans.
The popularity of this retirement scheme among UK residents is mainly due to its IHT exemption which makes it an essential offshore scheme to opt for.
Some of the common questions are discussed here.
Is it expensive to avail of this scheme? In the year 2006, when QROPS scheme was first introduced, the charges were quite high.
But, within a short span of time the charges dropped significantly due to the increase in market competition.
However, the QNUPS providers are certainly not charging higher fees than QROPS providers were.
You will be even more surprised to find that the charges the big overseas companies take for providing professional assistance can easily be negotiated and this makes the scheme even more cost effective.
What kind of investment options do I have? You can invest anything in QNUPS as long as it meets the criteria set by HMRC.
It even includes asset classes, which are of wide varieties like fine wine and antiques.
It also has the provision for residential properties.
But the investors cannot put their own house into the investment pot.
What is the set up time period? It takes approximately 6 weeks for the private UK schemes to get transferred into QNUPS.
This is simply because the administrators of the old scheme need to be involved in the process.
However, the time for setting up a new account with new assets will obviously take lesser time because you do not have to deal with the asset transfer process from the UK.
Therefore, organizing funds is much quicker, if you set up a new account.
What is the tax consequence of this scheme? The IHT or Inheritance Tax would not be levied for QNUPS, from the UK point of view.
But, it might be different with the destination country, because its tax structure would be different from that of the UK.
It is better to consult an adviser who deals with these schemes in the destination country.