IVCM NZ PIE Superannuation Fund (QNUPS)
QNUPS were introduced by the Statutory Instrument (SI) 2010/051 which specifically makes this type of overseas pension exempt from inheritance Tax (IHT).
QNUPS has become market terminology used to describe an overseas pension scheme that meets the QNUPS regulations but is not a Qualifying Recognised Overseas Pension Scheme (QROPS).
A QNUPS should be used as part of an overall retirement planning solution, and not solely for IHT purposes, although this is one of the main benefits for clients. QNUPS can hold a number of assets, including but not restricted to; direct residential property, portfolio bonds and cash. The client should understand the restrictions that come with holding these assets in a QNUPS.
QNUPS can be used to provide extra retirement provision for individuals that will have a pension ‘deficit’ but are restricted to using an existing UK registered scheme because of exceeding (or close to exceeding) the lifetime allowance or the annual allowance.
Withdrawals from QNUPS are subject to the rules of where the QNUPS is established.
IVCM NZ PIE SUPERANNUATION FUND (QNUPS)
BENEFITS & REQUIREMENTS
Questions & Answers
A qualifying non-UK pension scheme (QNUPS) is defined in IHTA1984/S271A as a pension scheme that is not a registered pension scheme but is established in a country or territory outside the UK and meets the requirements of Regulations made by the Commissioners for HMRC (The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010 (SI 2010 No. 51)).
To be a QNUPS, a scheme must meet the following criteria, as set out in 2010 regulations (which closely follow the QROPS requirements):
- It must be recognised for tax purposes in the jurisdiction in which it is established;
- It must be available to the local population in the jurisdiction in which it is established; and
- If the scheme is not an occupation scheme, it must have the same minimum retirement age as in the UK and at least 70% of the member’s funds must be designated to provide an income for life.
- all QROPS are QNUPS, but not all QNUPS are QROPs
- A QNUPS does not have the same reporting requirements as a QNUPS;
- A QNUPS is unable to receive a transfer from a UK registered scheme without giving rise to unauthorised payment charges.
QNUPS are predominantly used to provide extra retirement provision for individuals that will have a pension ‘deficit’ but are restricted to using an existing UK registered scheme because of exceeding (or close to exceeding) the lifetime allowance (Currently £1m for 2017/18) or the annual allowance. (Presently £40,000 per annum if you earn less than £150,000 p.a.)
Like a QROPS and UK Registered Pension Schemes, death benefits from a QNUPS are entitled to the same exclusions from Inheritance Tax. Also, they are not subject to a death benefit tax charge, regardless of residency. Each individual Scheme may have different retirement and death benefit provisions than dependent on the jurisdiction in which the QNUPS is based.
A QNUPS has very flexible pension investment options. Long term investment growth is therefore less restrictive than growth in a UK registered pension scheme.
QNUPS can be funded by contribution or transfers from international pensions, therefore it’s attractive to clients that do not have a UK pension to consolidate and enhance their offshore retirement planning.
If structured correctly capital gains tax should not be taxed other than UK residential property.
Unlike a QROPS, a QNUPS cannot receive the transfer of UK Pension Benefits without incurring an unauthorised payment and scheme sanction charge.
QNUPS are not subject to the same restrictions on taking benefits. QNUPS do not have any reporting requirements to HMRC.
No, this can only be transferred into a QROPS. A QNUPS cannot be established without sitting alongside a QROPS
Yes, IVCM offer a wide range of retirement solutions including; QNUPS, SIPP, QROPS and company pension schemes.
The IVCM (NZ) PIE Superannuation Fund is both a QNUPS and a QROPS dependant on your category of membership. If you make a rollover from a UK registered pension scheme the contribution will be treated as a QROPS, if you make a contribution from any other source it will be treated as a QNUPS.
No, IHT avoidance cannot be the reason for using a QNUPS. It must be used for genuine retirement planning and provision.
A QNUPS is not appropriate for every client but is a useful retirement planning tool. Key considerations are;
- Contributions offer no tax relief but a large proportion of the benefits are largely taxable (as a taxable income – dependent on jurisdiction).
- Contribution levels have not been confirmed and must be pre-approved by IVCM before any contributions are made.
- Additional fees by IVCM may be applicable.
Yes. If you are over 18 years of age – you are eligible.
You will be a Notified Foreign Investor with a tax rate of 0%.
No, a QNUPS must be held in a single name. Your beneficiary is your Estate.
You must read the Product Disclosure Statement before applying for membership in the IVCM (NZ) PIE Superannuation Fund.
No. However IVCM cannot provide you with personal financial advice. Therefore, we strongly recommend that you consult with an appropriately licensed financial professional.
A QNUPS cannot receive transfers from a UK Registered Pension Schemes. Transfers from a UK registered pension scheme can only be transferred into a QROPS. A QNUPS can only be funded by contributions.
As a Non UK Scheme, the contributions will not attract tax relief but an individual can contribute cash or many other asset classes including residential property but they cannot contribute their main residence or wasting assets.
As a result of the current IHT benefits of a QNUPS; HMRC state that the amount of contributions must be ‘appropriate’ to the individual’s circumstances. This is clearly to prevent large contributions being made solely for the purpose of IHT avoidance. However, HMRC do not specify what is ‘appropriate’ nor have they formally confirmed a QNUPS funding structure.
Contributing to New Zealand Superannuation is subject to restrictions on withdrawal. You must have attained age 55 in order to commence a Transition to Retirement income stream and you do not have full access to your funds until after age 65.
Please read the Product Disclosure Statement and consider the UK taxation implications of any withdrawal from the Fund.
If you return to the UK you can continue to draw pension from the IVCM New Zealand QNUPS.
Wherever member circumstances change, we strongly recommend reviewing the appropriateness of the QNUPS, any potential taxation and associated charges.
Any change in relation to your personal circumstances you are required to update IVCM (Aust) Pty Ltd in writing immediately.
IVCM (Aust) Pty Ltd
Lvl2, Suite 209, 25 Solent Circuit
Norwest Business Park, Baulkham Hills NSW 2153, Sydney
Tel: +64 (0) 4 888 1430
Fax: +61 (0) 8 8178 0257
Transfers are restricted. Please refer to the Product Disclosure Statement.
It depends on when you entered the product. Please refer to the Product Disclosure Statement.
There are a range of investments in GBP and AUD. Please refer to the Investment Guide.
No, you can hold all or part of your funds in your default cash account until you are ready to invest them. Please check with your financial adviser for the rate of interest currently available.
The IVCM New Zealand QNUPS is a member directed pension scheme and therefore all investment decisions are the responsibility of the member and their financial adviser. Neither IVCM nor any of its affiliates give advice relating to the suitability of investments and cannot be held liable for any losses because of investments held within the IVCM New Zealand QNUPS.
Yes. A QNUPS gives you the flexibility to choose and change your investments when you want.
Yes, the IVCM New Zealand QNUPS holds a cash account before money and investment decisions are instructed.
Retirement is the act of taking benefits, pension commencement lump sum or income, from your QNUPS. This can be done from your 55th birthday.
Members of the IVCM New Zealand QNUPS are never obligated to take benefits at a specified age.
No. Once invested in a pension you cannot withdraw those funds until the minimum retirement age.
Minimum retirement age is 55 this may increase to age 57 from 6th April 2028.
There is no maximum retirement age for members of the IVCM New Zealand QNUPS.
Complete a Benefit Request Form – available from our website.
All income paid from the IVCM New Zealand QNUPS will be paid gross of income tax at source, which for non-NZ resident is 0%.
You may be subject to tax in your country of residence and it is the responsibility of every member of the IVCM New Zealand QNUPS who is receiving income to seek professional tax advice as to whether there is a further liability.
Yes. An annuity is a type of insurance policy that provides a regular income for life.
If you die before age 75 and you have not taken benefits from your IVCM New Zealand QNUPS then your entire fund will be paid to your Estate as a tax-free lump sum.
If you die after age 75 and you have not taken benefits from your IVCM New Zealand QNUPS then your entire fund will be paid to you Estate as a tax-free lump sum.
If you die after age 75 and you have been taking benefits AND you are within the Member Payment Provision Period (currently 10 full UK tax years from the date of leaving the UK and 5 years form date of transfer) your payment may be subject to UK taxation. Outside the MPPP, your entire fund will be paid to you Estate as a tax-free lump sum.
Members of the IVCM New Zealand QNUPS have online access to their account. They will be issued with a member log on upon acceptance into the Fund.