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What is a Qualifying Recognised Overseas Pension Scheme (QROPS)?

A QROPS is a pension transfer scheme that is based in a jurisdiction other than the UK but is recognised by HMRC and follows the same standards or equivalent as a UK pension. Most expat UK pensions can easily be transferred into a QROPS, as long as the overseas scheme is registered with HMRC and is fully compliant with the standards of the jurisdiction it is domiciled in. QROPS’s profile was increased after HMRC introduced a series of new pension rules on 6th April 2006.

A QROPS plan will give you the potential to do the following:

  • Reduce income tax on drawdown
  • Remove the requirement to purchase an annuity
  • Give you the ability to pass on remaining pension funds to beneficiaries on death, potentially without taxes
  • Access up to 30% of the fund as a Pension Commencement Lump Sum (PCLS)
  • Plan your drawdowns in line with your income needs
  • Invest your funds with enhanced freedom and choice


What is a Qualifying Non-UK Pension Scheme (QNUPS)?

In essence, a Qualifying Non-UK Pension Scheme is nothing more than a definition.

This definition was introduced by Her Majesty’s Revenue and Customs (HMRC) within “The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010” to rectify a previous omission in the Finance Act 2004 (which had effect from 6 April 2006). This omission restricted protection from UK Inheritance Tax to UK registered pension schemes and section 615(3) schemes only.

What are the prescribed requirements for a Qualifying Non-UK Pension Scheme?

In essence only a scheme that is broadly equivalent to a UK registered pension scheme would meet the requirements to be defined as a QNUPS. The requirements are similar to the prescribed requirements for a pension scheme to be a Qualifying Recognised Overseas Pension Scheme (QROPS).

Key Benefits of QNUPS (include)

  • Investment diversity – including residential BTL properties
  • No restrictions based on earned income or UK lifetime/annual allowances
  • No maximum age limit for investment
  • Facilitates international pension consolidation
  • No obligation to draw income until age 75
  • Up to 30% tax free lump sum
  • Tax efficient

Who is QNUPS suitable for

  • Individuals wanting to save for their retirement.
  • High net worth individuals who wish to top up their pensions tax efficiently.
  • Anyone concerned about restrictions on UK Lifetime or Annual allowances.
  • Individuals who would like to place residential “Buy to Lets” in their retirement plan.
  • Foreign nationals with a potential UK IHT exposure.
  • Expats who retain their UK domicile status with potential UK IHT exposure.
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