Most definitely. There is effectively no ceiling to the size of your fund that will be tax-free. You will pay no tax until you have taken your 30% Tax-Free lump sum & you then start to remit your annual income back into your country of residence; at which point those monies will be liable to income tax.
The basic answer to this simple sounding question is “It depends on the individual, his Domicility & Residency status together with the existing structure – each case is slightly different. But YES, you do definitely need to re-visit the platform you are currently adopting.
Seriously not a good idea; potentially litigious. Three problems: a) you have to find a buyer willing to do it, so it limits your market; b) potential for HMRC to find a way of negating this if it were to prove an avenue for avoidance of their new charges ; c) thus thirdly, creating a massive potential CGT liability for the unwitting new owner on gains that he in fact never incurred. When the property eventually comes out of the Offshore entity the new unfortunate owner is going to cop the whole Gain for years when he never owned the property. Sheer madness. As a lawyer, private banker or Accountant, are you seriously going to advise your client to go down this route??! I think not.
And how do you spell inertia ….. ?!!!
That has been said quite a lot to us . And how long does it take to unscramble a BVI, in doing so to change assignment of Deeds to a property, let alone five or 10 of them, to then convince clients to do it, to have meetings with clients, to find the time for the trustees themselves to execute this business in effectively what will then be a three-month period????
On top of this there is Christmas, New Year, and then Easter starts on March 28th with folk going off on Easter holidays etc…. Why do people think Osborne/HMRC gave the world ONE WHOLE YEAR to do this??
So if someone wants to give proper pro-active planning advice to clients, they shouldn’t be doing a camel in the sand act. They should start now, get the wheels in motion now & if by Christmas HMRC decides not to go ahead with the CGT, not to make it retrospective, to make it 5% instead of the 28% forecast by every Accountant & Banker I have spoken with, to cancel the Annual Charges even though they have cleverly laid out the tables already & all the main Accountants are now sending out these tables as they believe they are implementable – then the adviser & his client can put a hold on it & re-evaluate. As it is SDLT (Stamp Duty) is now 15% for purchases – and is law already.
So I suggest you go back to such negative folk who take such a blinkered approach and give them these responses because if like most HMRC consultative documents, they make Zero changes to it – like they did with QROPS in Guernsey last December-April consultative period – the advice will then be wavering on negligent. Certainly the likes of Withers, GT, PWC, Coutts, Lloyds Pvt Bank etc… etc… believe it is worth bringing this to clients’s attention all over the world.
Hope this puts it in perspective.
Yes. If it is done before 10 years have elapsed then there will be a penalty charge by UK Revenue if the proceeds are remitted to Britain. However, if cancelled after 10 years, then no penalties. The Trustees will sell the assets & then pay the proceeds to the Settlor.
Providing the QNUPS was set up at arms length & the Assets were transferred into the Trust without the intention to Defraud, the investments held within a QNUPS are creditor-proof and cannot be accessed in any Bankruptcy proceedings.
QROPS is for transferring Pensions abroad. You have to live outside the UK or intend on leaving UK within 18 months. It should be your intention to retire outside the UK. You have to have worked in the UK and have a pension scheme in the UK.
QNUPS relates to transferring investment assets out of Britain. It doesn’t include Owner-Occupied residential property. Anyone can do it, whether they live in the UK or outside, irrespective of Nationality. You should also view the collective funds as part of your overall investment/retirement programme.
The proceeds are immediately free of IHT and pass to the beneficiaries outside of the deceased’s estate. They have a six-month period to make their mind up whether to remit all the funds into the UK or leave some outside and create a further QNUPS for themselves and their own investments. Otherwise, once the funds are back in the UK and duly invested once more into the UK, tax will be applied unless a further QNUPS is set up
Buy-to-let properties; commercial property; Publicly quoted Equities; Private company shares; a wine portfolio properly held in Bond and categorised; Fine Art if rented out and on a wall (i.e. not in a vault); cash on Deposit
A QNUPS can be funded with any non-tax relieved funds. Funds which are tax-relieved are those which have not been subject to tax when they otherwise would be. For example, taxable income which is contributed to a UK registered pension scheme is not subject to tax provided the total contributions do not exceed £55,000
That it is able to stand up as a pension i.e. that you are taking a benefit from it. You cannot put all your assets into a QNUPS and then not draw anything from it as it wouldn’t stand up to HMRC. Also the original purpose for which the pension was established must have been to help provide an income in retirement
We believe that an income of £20,000 p.a. is an acceptable amount but it is obviously dependent on the size of the funds in the QNUPS. Certainly to benefit from Malta’s double taxation treaty agreements with the EU, an income of £20,000 p.a. must be maintained
We could set up an offshore company or an LLP to hold the property. However, the company should be held below the QNUPS before the property is acquired through said company
Initially it was a Directive from the EU. The HMRC set up the rules for firstly QROPS in 2006. Then the in 2008 after further EU Directives, the Treasury devised the framework for QNUPS in the Finance Act 2008 which became statute in the 2010 Inheritance Tax Regulations which gave clarification of the Inheritance Tax treatment of QNUPS and other overseas pension arrangements
Firstly, because it is new! It only became law in Dec 2010. Secondly, the British don’t “Do Offshore” very well. It has taken them nearly six years to get to grips with QROPS and that was only because IFAs have been promoting them due to the commissions they earn through selling an unnecessary platform between the QROPS Trust and the investment funds. Since there is no insurance product that can be sold by IFAs into a QNUPS, there is no industry other than the Trustees themselves promoting them.
If you do not have UK investments which can be left for the long-term, which you can eventually drawdown from for your retirement, then it would not be in your best interests. With regards QROPS, you must live abroad for at least five years, before you can start drawing your pension; you must be at least 50; you should be intending to stay abroad. You obviously need to have a pension in Britain!
Absolutely not. It is a totally unnecessary additional platform and therefore an additional charge. Typically to pay the IFAs commission, there is a charge of up to 1.75% p.a. on the Personal Portfolio Bond which is achieving nothing since the QROPS Trust provides all the tax flexibility that is needed. What is more, for a British Dom’, on returning to the UK and drawing the proceeds from a PPB, there are huge potential tax liabilities.
Proceeds from both QNUPS and QROPS are tax-free in both Malta, Guernsey etc… Depending on where you ‘Remit’ the monies back into, you will be liable for taxation on the remitted monies as income. However, through Malta’s specific pension legislation and Double Taxation Treaties with EU countries, UK and Switzerland, there are distinct tax benefits in bringing funds back onshore in retirement. In countries where there are no tax penalties for income remitted from abroad – such as the Far East – or countries where there is no tax such as most in the Middle East, there are no tax implications.
Not at all. They stay the same as they are. Houses remain the same houses. Shares, private company shares stay the same. They just have the benefit from Gross Roll-Up of a tax-free nature i.e. they grow as assets in a Tax-Free compound growth manner
Your QNUPS Trust is your own, individual trust totally protected and ring fenced from any other Trust. You are your own Investment Manager – or whoever you appoint. The Trustees can only act on the Investment Manager’s instructions.
