slide 1:

QROPS vs QNUPS – What Is The Difference qropspensions.co.za/qrops-vs-qnups-what-is-the-difference/ You are here: QROPS vs QNUPS By definition all Qualifying Recognized Overseas Pension Schemes QROPS are QNUPS-Qualifying non-UK pension scheme. However not all QNUPS are QROPS. In technical terms QNUPS is neither a real product nor a pension scheme. These are generally rules that give pensions schemes that are overseas the ability to be inheritance tax exempt as long as there is no evidence of deliberate tax avoidance. QROPS on the other hand are schemes that are established outside the UK recognized in the UK and regulated by the UK tax authority. Where Recognized Overseas Pension Schemes QROPS do not meet HM Revenue and customs requirement when applying for UK inheritance tax exemption they may be subjected to unauthorized payment charges. These charges are not subjected to QNUPS. Regulation Of QROPS and QNUPS A-Day regulation of 2006 made it possible for anybody in the UK could opt for their pension scheme to

slide 2:

be transferred into QROPS as long as the pension was not a life time annuity. While these regulations attempted to simplify UK pension legislations they omitted protection of some non-UK pension schemes from inheritance tax. This omission meant that UK pensions being transferred to QROPS will be subjected to the UK inheritance tax. This problem was solved in 2010 with the introduction of The Inheritance T ax Regulation 2010 which created QNUPS. Other than introduction of QNUPS the UK pension scheme has undergone numerous changes which include but not limited to reduction of annual allowance removal of annuity at age 75 anti-foresting reducing lifetime allowance among others. QNUPS and QROPS do not have the same level of regulations. Here are some of the main differences. Reporting Requirements For QROPS and QNUPS QROPS are subjected to the reporting requirements for any payments and transfers for members who: 1. UK resident when the payment was made 2. Non-UK residents present in the UK during the tax year the payment was made or was in the UK in any of the 5 tax year preceding the said tax year Reporting of income payments transfers or death benefits is done to the HMRC for five complete years before you become a non-UK resident. Name and address are among the reports you give to HMRC. No reporting is required for QNUP thus no details need to be provided to HMRC. Contributions Are Different For QROPS vs QNUPS You are allowed to make further contributions to QROPS as long as the reporting requirements of any payments are made in line with the above reporting conditions. However the level and taxation of

slide 3:

income investments and benefits such as death benefits could be restrictive. Contributions made to QNUPS do not have QROPS restrictions. The investor will not need to have any relevant income since contributions do not attract any UK tax relief. In the same regard some QNUPS may require contributors may look at individual overall wealth to determine what is necessary to provide them with an appropriate level of retirement. Transfers Transfers from a UK registered scheme to QROPS is possible and allowed while QNUPS cannot receive any transfers from a registered UK pension scheme as this is considered as unauthorized payment by HMRC. This is one of the major differences between QNUPS and QROPS. Investment Investment in QROPS can be more restrictive than in QNUPS. QNUPS have a wider investment choice which includes investing in residential property and proving loans to members. Learn more about QROPS and the HMRC.