Qualifying Non UK Pension Schemes in South Africa
We’ve put together the information that is important when considering QNUPS South Africa pension options.
A QNUPS is a Qualifying Non UK Pension Scheme. Easy as that…but what does it mean? It is advisable to download our guide which will quickly bring up to speed on the salient points.
QNUPS South Africa Questions?
- What is a QNUPS?
- Will this pension scheme Save Tax?
- Do I Qualify?
- What if I live in South Africa?
What You Need to Know About QNUPS South Africa
If you are thinking of investing your pension overseas, then you should consider taking a QNUPS. This pension overview will give you an understanding of what it’s all about; a Qualifying Non-UK Pension Scheme that was introduced in February 2010. In the year 2004 the Finance Act stated that any money placed in QROPS would be subject to UK inheritance tax in the event of the death of the fund holder. Fortunately, with the introduction of this retirement fund, any money that is transferred to the fund will not be subject to inheritance tax. This overseas pension scheme overview will give you a general idea of what it is all about.
QNUPS vs QROPS
- QNUPS is Qualifying Non-UK Pension Scheme
- QROPS is Qualifying Recognised Overseas Pension Scheme
- An individual taking a QROPS transfer must live outside the United Kingdom for tax purposes for at least 5 years
- An individual taking a QNUPS can be resident in the United Kingdom or in any part of the world but who have retained UK domicile status
- Every QROPS has to be reported to the HMRC for 5 years after you have left the United Kingdom
- QNUPS does not require reporting to the HMRC
- With QROPS, once you have taken an initial lumpsum, you can only derive income from what is left of your funds
- With QNUPS, you can continue to invest into the retirement fund even after taking an initial lump sum
- The maximum age limit for taking a QROPS is 75 years
- There is NO maximum age for taking a QNUPS
- Assets might have to be liquidated to take a QROPS
- Almost anything can be put into a QNUPS
Benefits of Qualifying Non-UK Pension Scheme in South Africa
There are several benefits available when you invest in this type of pension fund. However, due to various technicalities in each case, it is advisable to check this properly with your financial advisor. Some of the benefits are listed below in this overview:
- Tax free asset growth
- Widely available in several countries and not only in countries that have Double Taxation Agreements with the United Kingdom
- Tax efficient – no inheritance tax and may be able to avoid local wealth taxes in many cases
- No maximum age limit
- Contributions can be for income derived other than from employment
- Growth is free from Capital Gains Tax (CGT). This means that the capital growth of your asset will be passed on to your named beneficiary
- The costs associated with taking a QNUPS is extremely reasonable and includes a onetime setup fee
- There is no minimum value to take a QNUPS; however, providers might recommend a minimum amount
- May hold assets such as property, arts, antiques, fine wines and investments
- You can decide who will inherit assets and funds by designating beneficiaries
QNUPS Overview – Tax Implications
A Qualifying Recognised Overseas Pension Scheme offers a legal and tested method for mitigating IHT whereby assets are sheltered in an overseas pension scheme. Assets built up in this type of pension fund can be passed on to named beneficiaries with substantial tax saving. Assets built up in this pension fund are free of Capital Growth Tax and upon death of the holder are transferred to the beneficiary with the additional growth as well as the inheritance tax saving.
You can contact us and our financial advisor will discuss this overview with you in detail.
“Very easy to follow guide. Thank You! It showed me what questions to ask my financial adviser.”
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