Spot the difference – QROPS and QNUPS

Let’s get the confusing bit out the way first. A QROPS (Qualifying recognised Overseas Pension Scheme) is always a QNUPS (Qualifying Non-UK Pension Scheme). But a QNUPS doesn’t have to be a QROPS. So what’s the difference?

QNUPS have been around for some 18 months now, designed to correct an HMRC error in UK QROPS legislation which meant that offshore pension holders might have been subject to UK IHT. An overseas IHT-free pension scheme became known as a QNUPS and included all QROPS within it.

However, the status of a QROPS as a recognised scheme with HMRC means it has to conform to UK reporting rules, which the unrecognised QNUPS does not – it just has to adhere to UK laws for overseas pensions, namely that it’s based outside the UK, regulated as a pension scheme in that jurisdiction and recognised there for tax purposes.

Additionally, while a QROPS only allows you to transfer funds from an existing UK pension, a QNUPS lets you transfer property and non-pension possessions.

All of which means that a QNUPS offers excellent tax mitigation opportunities for certain individuals, particularly UK domiciled HNWIs who have a shortfall in their pension provision.

To find out more about the differences between QNUPS and QROPS, and the benefits of each, please contact us for an informal, no-obligation discussion.