Qualifying non-UK pension schemes (QNUPS)

Produced by Tolley
Qualifying non-UK pension schemes (QNUPS)

The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Qualifying non-UK pension schemes (QNUPS)
  • Introduction
  • The legislative framework
  • Conditions to be a QNUPS
  • QROPS / QNUPS and IHT planning
  • Consultation on uniformity of IHT treatment for UK-registered pension schemes and QNUPS


The inheritance tax exemptions that apply to UK-registered pension schemes generally were not extended to Qualifying Recognised Overseas Pension Schemes (QROPS) in FA 2004. The result was an unsatisfactory position where, strictly according to the law, the exit charge and periodic charges associated with discretionary trusts applied to a QROPS. When this was brought to HMRC’s attention it was recognised as an unintended error.

As a result, SI 2010/51 (subscription sensitive) was made to correct the position, introducing a new acronym into the pensions vocabulary, ‘QNUPS’.

The legislative framework

QNUPS are referred to in IHTM17025 as follows (the legislative references are all subscription sensitive):

"A qualifying non-UK pension scheme (QNUPS) is entitled to the same exclusions from Inheritance Tax as a registered pension scheme but they will not necessarily provide similar pension benefits or be structured in a similar way.

A QNUPS is defined in IHTA 1984, s 271A 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 The Inheritance Tax (Qualifying Non-UK Pension Schemes) Regulations 2010 (the Regulations) (SI 2010 No. 51).

These regulations specify that a QNUPS must, in the country in which it is established, satisfy certain regulatory requirements and be tax-recognised. If the country of establishment has no system of regulation or tax recognition.... the scheme must provide for 70% of the member's funds to be paid out as a pension income for life."

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