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Callum Beausire

Pensions Made Easy #7 – Can a QNUPS be useful for people not resident in the UK?

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An article by Roger Berry, Managing Director of Concept Group Limited.

A Guernsey QNUPS may be useful for anyone looking to provide funds for their retirement. The gross roll-up of investments in a Guernsey QNUPS and the payment of benefit gross means from a Guernsey perspective the schemes are tax neutral. No tax relief is given on contributions into the scheme.

Whilst a QNUPS is useful for UK residents, particularly those who have depleted or exhausted their lifetime allowance for contributions into a UK registered pension scheme (currently £1.055 million in UK tax year 2019/20) to create efficient pension savings and on death.  There is also planning opportunities for non-UK residents that are UK Domiciled.

Domicile is your permanent home, usually assigned at birth, it does not change necessarily if you move away. Breaking UK Domicile is difficult and even apparently tenuous links to the UK can maintain your UK Domicile indefinitely. You can be “deemed” Domicile if you have spent extended periods in the UK – typically 17 of 20 tax years.

Any person who has a UK Domicile, which on birth or subsequentially obtained is hard to remove, may have their entire world wide assets exposed to UK IHT at 40% on death, not just UK situated assets.

Using a Guernsey QNUPS to provide funds on retirement has the benefit of being based in a highly respected and safe jurisdiction with high levels of regulation and an Ombudsman to turn to If anything goes wrong.

Any funds remaining on death can be passed to loved ones with the potential benefit of being outside UK IHT.

This can be a complex area on which professional advice should be taken. Nothing in the above statement should be construed as tax or other advice or be relied upon.

If you have any further questions, please do not hesitate to contact us.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this document should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this post.

The information in this document is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Copyright © 2019 Concept Group Limited

Pensions Made Easy #6 – Can a UK resident benefit from a QNUPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Potentially they can.

A Guernsey QNUPS will be a local, approved and regulated pension scheme. Whilst it pays benefits gross without the deduction of Guernsey tax a UK resident member will be exposed to UK income tax on benefits received. Whilst typical QNUPS have underlying investments of marketable securities and portfolios, they can, unlike a QROPS, better invest into assets such as residential property, vintage cars, stamps, wine, jewellery etc. Structuring of QNUPS can be a complex matter requiring professional tax advice, but with care QNUPS can be a useful way for UK residents to add to their savings for retirement and potentially benefit from exemptions to IHT.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and or any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct. Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #5 – Am I stuck in a QROPS, can I get out?

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An article by Roger Berry, Managing Director of Concept Group Limited.

For members in a current QROPS i.e Maltese or Gibraltar QROPS, it is possible to transfer out to a Guernsey QNUPs or delisted QROPS to achieve greater flexibility on investments and tax benefits but certain criteria needs to be met.

  1. Original transfer to existing QROPS was pre April 2017
  2. Members must be aged 55 or older
  3. Members must be non-resident from the UK for more than 5 UK tax years.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #4 – What are the advantages of being a member of a QNUPS or a Guernsey QROPS delisted in 2012?

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An article by Roger Berry, Managing Director of Concept Group Limited.

  • No ongoing reporting to HMRC
  • Benefits are paid gross out of Guernsey, irrespective of country of residence of the member, no reliance on tax agreements, as in Malta and no 2.5% tax as in Gibraltar
  • 30% Pension Commencement Lump Sum (“PCLS”) can be taken
  • Loans may be given to members
  • Wide investment choice, e.g. not restricted as in Malta
  • Flexible Access to lump sums possible, not available in Gibraltar
  • Flexible benefits options, drawdown and annuities
  • Designed to meet QNUPS requirements and therefore potentially exempt from IHT
  • Death benefits paid out gross of tax in Guernsey
  • Capable of receiving transfers in from other delisted QROPS and current QROPS if certain criteria is met
  • Contributions can be made to the scheme.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #3 – Is a member of a delisted QROPS disadvantaged by not being in a current QROPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Generally no, because once your pension transfer has occurred from a UK scheme to a QROPS you have achieved the main goal of moving your pension assets out of the UK. The one disadvantage of a delisted scheme is that it cannot receive a transfer directly from a UK registered pension scheme. None the less, members of a delisted scheme who have already transferred their UK pension across may be in a very similar position to members of a current QROPS, and not worse off. They may actually be better off.

It is perhaps odd to think that being a member of a delisted QROPS might be better than being in a current QROPS, but that can be the case. QROPS have been delisted for many reasons, some not good, so some delisted schemes are considered by HMRC never to have been a QROPS and in such circumstances HMRC can seek to levy significant taxes. However many delisted QROPS have chosen to delist or were delisted as a result of changing UK legislation. In those circumstances, HMRC is usually not claiming that the scheme was not a QROPS previously so member’s death benefits are maintained.

Significant changes to HMRC QROPS legislation occurred in 2012 and as a result, inter alia, most Guernsey QROP schemes were delisted. Quite possibly because the advantages of the Guernsey QROPS were perceived to be too good from a UK perspective. Whilst Guernsey can only accept new transfers to QROPS for Guernsey resident members, members in Guernsey QROPS that were delisted in 2012 have the benefit of having their position effectively grandfathered by HMRC, maintaining a very favourable position not generally achievable in current QROPS.

“If a pension scheme that is a QROPS on 5th April 2012 no longer meets the conditions to be a QROPS on 6th April 2012, members of that pension scheme who have already transferred their pension savings will be able to remain as members and receive a pension paid from the sums transferred without incurring additional tax charges.” – HMRC Pensions Manual at the time.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #2 – What is a Delisted QROPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

Delisted QROPS are schemes that have been delisted by HMRC at the request of the scheme administrator or by HMRC and may still carry reporting requirements to HMRC and restrictions on investments, the exceptions are schemes that were delisted in early 2012, or before, which no longer have reporting requirements

Schemes delisted by HMRC may never have met the Recognised Overseas Pension Scheme (“ROPS”) requirements and members of such schemes may have tax issues to resolve with HMRC. This contrasts with schemes that choose to delist or nor longer meet new ROPS requirements. These delsited schemes may be advantageous for members. Delisted QROPS are usually a Overseas Pension Scheme (“OPS”) i.e. lacking in Q (“Qualification”) and R (“Recognition”). If they contain UK tax relieved funds they are also Relevant Non-UK Pension Schemes (“RNUKS”).

Any scheme that is a RNUKS can fall within the application of certain UK tax charges, despite the member no longer being resident in the UK, and even if the scheme has been delisted.

These charges may be completely avoided if the transfer to the QROPS was pre April 2017 and the member has been non-UK resident for more than 5 complete UK tax years.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and nothing in this summary should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of this summary.

The information in this summary is based on our understanding of current laws and practices, both of which are subject to change. Whilst every effort has been made to ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey) Law, 2000 and are regulated by the Guernsey Financial Services Commission.

Pensions Made Easy #1 – What is the difference between a QROPS and a QNUPS?

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An article by Roger Berry, Managing Director of Concept Group Limited.

People use QROPS to transfer UK tax relieved pension funds overseas. QROPS are generally for non-UK resident members or for people who intend to be UK non-resident in the near future. QROPS have restrictions on investing in taxable property e.g. wine, stamps, vintage cars, residential property but QNUPS do not. QNUPS are often used both by UK resident and UK non-resident members. You cannot transfer UK tax releived pensions into a QNUPS without creating very significant tax charges. Only a QROPS can achieve a tax free transfer.

This can be a complex area on which professional advice should be taken. The above statement is a simplified summary answer.

If you have further any further questions, please do not hesitate to contact us on info@cgl.gg.

IMPORTANT

Concept or Concept Group means Concept Group Limited, Concept Trustees Limited and any other group or associated companies. Concept does not provide financial nor tax advice and noting in this article should be construed as such, nor shall they be held responsible for any liability or loss arising directly or indirectly from any reliance placed upon the content of his article.

The information in this document is based on our undertanding of current laws and practices, both of which are subject to change. Whilst every effort has been made o ensure the information is correct, Concept cannot accept responsibility for its interpretation, or any future changes to law and practices in any relevant jurisdiction, some of which may have retrospective effect.

Concept Group are licensed under the Regulation of Fiduciaries, Administration Business and Company Directors etc (Bailiwick of Guernsey Law, 2000 and are regulated by the Guernsey Financial Services Commission.

UK Pension Scam Industry Group relea­­­­ses new updated Code

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Roger Berry FCCA, Managing Director of Concept Group Limited comments: ­­­

Pension administrators faced with dubious transfer requests have long had concerns for their members over pension liberation, but they now need to be mindful of an increasingly sophisticated environment involving scam investments, commission swindles and other dishonest behaviour.

This sophistication requires pension administrators to respond, in order to protect their members.

The release of the new code, with amongst other things – up to date guidance, case studies and checklists, is a centralised resource to assist pension administrators.   We are delighted to have been one of the authors of the new updated code that provides helps to industry.  Although the code is UK centric it has great relevance and contains good practice for offshore pension trustees and administrators to consider.

Version 2.0 of the Code is now available to download from the PSIG website.

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