Unlike with traditional pension schemes where there is a time period within which investments have to be made, QNUPS allows unrestricted amounts to be invested without any time limit. This way an individual can invest his inheritance into this scheme to prevent his heirs having to pay inheritance tax.
Nowadays, with life expectancy increasing considerably, quite often you come across two generations in a family who have passed retirement age and QNUPS is designed to benefit exactly this type of family. Imagine a person who retires at 55 and has an eighty year old parent still alive. When the younger person inherits the parent's assets, he will have to pay Inheritance Tax on what he gets. In addition, if he subscribed to a traditional pension scheme or even an offshore fund such as QROPS, he would not be permitted to make a further investment into his fund after he retires. In addition, when his heirs inherited all the assets after his death, they would once again be subjected to Inheritance Tax.
It was with the interests of such people in mind that the UK Government amended the IHT rules in February 2010 to allow a new scheme called QNUPS (Qualifying Non UK Pension Scheme). Under this scheme, an individual can invest his retirement funds in an offshore fund that meet certain conditions. These funds are located in several countries all over the world, even in those which do not have a double taxation agreement with the UK.
The advantage of QNUPS is that it has no maximum time period during which investments have to be made. Therefore, if you come into an inheritance after you retire or want to prevent your heirs from being subject to IHT after your death, and then you can transfer your assets to this scheme even after you retire. This way, the will not have to pay any tax or death duty on what they get from you.
Unlike other schemes, there is no restriction in QNUPS that only income earned from employment can be invested. There is also no restriction in the maximum amount that can be invested. In addition, you can also transfer other high value items such as residential property to these schemes to save you heirs being taxed when they inherit it. An added benefit is that unusual items such as valuable old wine bottles and antiques can also be transferred to these funds.