A QNUPS is a Qualifying Non-UK Recognised Pension Scheme.
QNUPS legislation was introduced in Gibraltar in 2014 and Gibraltar QNUPS are available to both UK and non-UK residents. The UK introduced QNUPS legislation in 2010 and in doing so extended the inheritance tax exemption that applied to registered pension schemes to QNUPS.
In 2006 the UK Government introduced a lifetime allowance for pension schemes. The lifetime allowance is the amount of pension benefit that can be taken for a pension scheme without crystallizing additional taxation. The allowance includes both retirement income and lump sums and is currently £1,055,000 for the year 2019 to 2020.
QNUPS have become a popular mechanism for retirement savings especially for individuals who have accumulated retirement savings in excess of £1 million. The inheritance tax exemption means that in general on the death of a member there should be no inheritance tax levied on the assets held within a QNUPs.
Contributions to QNUPS are funded from either accumulated wealth or from taxed income and not from UK taxed relieved funds. The payment of contributions to a QNUPS needs to be proportionate and should not affect an individual’s standard of living.
There is an opportunity for Gibraltar to increase its QNUPS business particularly as mentioned above for individuals who are close to exceeding the UK lifetime allowance for tax relieved savings and for individuals who have a limit on their domestic contributions.