If you have a client considering leaving the UK, provided their pension pot is of a reasonable value, Mr Boniface said a Qrops should be considered.
He said transfer to a Qrops may result in larger tax-free lump sums being permitted than in the UK, pension income may be able to be drawn down tax-free, or at a lower tax rate than in the UK and the overall flexibility may be much greater.
The pros of a Qnups are the same as above, but in addition to expats, they are also suitable as pensions for high net worth and high income UK tax residents and assets in them are free of inheritance tax.
In terms of cons, for both Qrops and Qnups, charges may be greater than in UK pension schemes.
A potential risk for both structures centres around transfers or contributions being made inappropriately or, specific to Qrops, those that HMRC deems does not meet its requirements.
This can happen retrospectively, owing to the self-certification in operation.
In either case, Mr Boniface warned HMRC could levy heavy fines and penalties.
This is why appropriate professional advice needs to be sought and advisers may be wise in consulting specialists when considering Qrops/Qnups for their clients.
