QNUPS structure – Viable for Buy-To-Let landlords?

Interesting research, thanks.

"The IHT exemption may be an important consideration for your UK domiciled clients wishing to incorporate valuable IHT savings into their retirement planning." Is a potential benefit, as well.

http://www.aviva-for-advisers.co.uk/site/public/tech-centre/tech-article-detail/overseas-schemes---qrops-or-qnups-

i rather have have the feeling that this could be one of the best posts i have ever read !

Reply to the comment left by "Trendo " at "16/12/2015 - 03:20":

"POINT OF ORDER"

When can I take a pension?

You can “retire” at any time from age 50 and must start to take benefits from age 75.

http://www.yourqnups.com/qnups-faqs/

Reply to the comment left by "Trendo " at "16/12/2015 - 03:26":

Tha Aviva link I gave states:

"benefits should not start payment until the member has reached the normal minimum pension age applicable in the UK (currently 55), unless benefits are taken under the scheme’s ill health rule."

Mark, I have been involved with QNUPS for several years now - especially for HNW individuals looking for tax efficient alternatives to traditional pensions - often looking to take advantage of the appealing ability to hold BTL properties within the offshore tax arrangement.

In my experience, and I think your original post show that things have not changed since I started looking at them, there are 3 main issues why these are not the holy grail many people think they could be:
1) Whilst it is possible to hold a BTL property in a QNUPS you cannot just move your existing property into the arrangement, especially if it has an existing mortgage (big problem for traditional lenders in this respect - they just wont allow it. This requires refinancing, if you can find a lender who is interested.
2) Transferring existing properties used to be 'allowed' without incurring CGT as the 'owner' still held a beneficial interest. This is no longer the case - similar to moving a personal BTL into a Ltd company in the UK.
3) QNUPS are a 'pension' and as such must be capable of providing an income. Not usually an issue due to the natural rental income but can cause problems. You should really have a mixture of more flexible traditional investment assets together with property - certainly not ALL your assets held in this type of structure as HMRC could become 'interested' due to the assets held with a QNUPS being exempt from IHT.
As Mark said in the original post - a possible option in very specific circumstances but certainly not for everyone and definitely requiring professional, regulated advice.

Reply to the comment left by "Andrew Hammond" at "16/12/2015 - 13:29":

Hi Andrew

Thank you for your excellent post and welcome to Property118. Based on my research to date I concur with everything you have said.

HOWEVER, the advisers I have been speaking to have provided me with some interesting examples of where a QNUPS might prove to be highly beneficial, i.e.:-

1) Where a high net worth individual has money to purchase Buy-to-Let investment properties, i.e. using a QNUPS structure as opposed to a company.

2) Where a HNW individual doesn't have a major CGT problem, for example where there has been no capital gain or where capital gains up to 5th April 2015 do not count due to being non-UK residents in a CGT favourable jurisdiction, e.g. Malta, Portugal, Andorra, Israel, Cyprus, Monaco, Belize etc. etc. In such cases an "in-specie" transfer may be possible and refinancing may also be avoidable using a Beneficial Interest Company Trust strategy - see >>> http://www.property118.com/avoid-refinancing-landlord-incorporation/82791/ However, SDLT would be payable so this would need to be factored into making a decision based on viability.

Do you concur?

Are there any other examples you can think of where Buy-To-Let landlords could utilise QNUPS to their advantage?
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If you are a 40% tax payer in retirement, you lend up having paid 44% tax on your gross rent by the time the money is in your hands. (A basic rate tax payer in retirement lends up paying 32%.)

So it only seem to offer IHT benefits and to help people that will be living somewhere will a lot lower tax rate when in retirement.

I had a VERY interesting meeting this afternoon talking about QNUPS and their tax advantages.

It was a real eye opener and I now believe they could be a lot more useful than I first thought.

I learned that a QNUPS can be a member of an LLP and that partners in an LLP can transfer in properties without CGT or SDLT and without having to refinance. There is then some really clever stuff that can be done between the 'partners' in terms of the QNUPS creating an annuity and swapping it for the beneficial interests in the property. That was just one of the strategies and there were a lot more. Please don't ask me for details but if you have £3m or more of property and want to know more I can put you in touch with an expert in this subject.
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Hi Mark - I would be interested in speaking to your contact about this.
Many thanks.
Andrew

Reply to the comment left by "Andrew Hammond" at "28/01/2016 - 07:20":

Please drop me an email with your contact details. My email address is mark@property118.com
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