QNUPS are often touted as being effective tax saving schemes.
But how does the tax side of a QNUPS work? If you ever thought that the taxman never makes a mistake, think again.
The only reason that QNUPS were brought into being was that the taxman admitted that they had made an error in previous legislation.
When the British government set up the legislative framework that would launch their pension simplification initiative (which went ahead in 2006), they overlooked the fact that certain overseas pension schemes were exempt from UK inheritance tax.
Accordingly, until the matter was clarified in February of this year, there was uncertainty surrounding the issue.
Since a new 2010 statutory instrument has come into force, the Treasury has made it clear that Qualifying Non UK Pension Schemes are not subject to UK inheritance tax.
QROPS are a type of QNUPS, and have been around since 2006.
Thousands of British expats have used them to make sure that their pensions are free from income tax.
But the definition of QNUPS goes wider than QROPS and some of the overseas pension schemes that were already out there.
Accordingly, the 2010 regulations have brought into being a new batch of overseas pension arrangements that have sprung up to take advantage of this rule.
IHT Advantages of QNUPS QNUPS are a sort of "QROPS lite" because they offer many of the benefits of a full blown QROPS but do not have to meet as many of the restrictions.
For example, QNUPS do not necessarily have to be based in countries which have signed a double taxation agreement with the United Kingdom.
This relaxation means that the schemes do not have any kind of reporting arrangement with HMRC.
However, some countries in which QNUPS are offered may well have Tax Information Exchange Agreements in place, which mean that tax authorities may share information in the event that a specific fraud is suspected.
Considerations about inheritance tax are often left until the last minute when it comes to financial planning, so it is refreshing to see the arrival of a scheme which puts it at the heart of investors' financial arrangements.
Unlike other IHT saving schemes, a QNUPS gives IHT protection as soon as an asset or cash contribution has been transferred.
Accordingly, should the worst happen to an investor shortly after their QNUPS has been set up, their heirs can take the assets free from death duties.
This is in stark contrast from many domestic IHT saving schemes, where the assets in question are only "safe" from inheritance tax after seven years from the scheme being put into place.
CGT and foreign taxes QNUPS grow free from CGT, which is a particularly attractive point given the recent rise in the rates for higher rate taxpayers.
Regarding foreign taxes, your QNUPS adviser should set out in detail what the tax implications of getting a QNUPS in each country would be.
QNUPS are available in many countries across the world, but it is likely that they will become most popular in tax neutral countries like Guernsey.