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Dear Sirs,

Seeing the announcement in your publication yesterday of Kleinwort Benson launching their QNUPS, is on one hand very re-assuring given the respect they are afforded both in the City and worldwide financial markets. It is good to see that the UK is slowly coming to recognise the immense value of a QNUPS trust arrangement.

However their press-release in your publication causes me huge concern as I suspect the individual responsible for drafting it is neither a pension' s specialist nor fully understands the implications of the laws surrounding both QROPS and QNUPS. It is essential to stress that the transference of assets out of the UK into a QNUPS trust in say Guernsey must be viewed as strategic planning for pension and retirement purposes. The fact that there are huge taxation benefits from a CGT and even income tax standpoint, should be the catalyst to create the benefits of Gross Roll-Up within the pension pot - but not the cause.

By making a large issue out of the IHT implications of a QNUPS, as was reported in your article, the KB announcement misleads the public as to the purpose of a QNUPS. It is absolutely essential that the vehicle is portrayed as a pension product. It is not an IHT exemption exercise. Were it so then the HMRC would come down on it as an artificial scheme and ban the provider and tax the settlor. There is no way that any provider, any Trustee, or indeed a publication such as yourselves, should be promoting a QNUPS as an Inheritance Tax loophole. Do this and the HMRC will quite rightly jump on it from a great height.

Yours faithfully,
Christopher Coleredge Cole

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This was not the full press release and I would refute any suggestion that KB have misled anyone; this is not a KB article of any kind.

The simple fact is that the Copia + Retirement Plan meets the criteria laid down in the relevant statutory instrument to be regarded as a QNUPS. That is a statement of fact – this is a Guernsey 157A multi member RATS that meets all the criteria laid down by HMRC in order to be regarded as a QNUPS. There are many benefits to retirement planning through a Guernsey 157A scheme and the fact that it may also qualify as a QNUPS and thereby potentially achieve IHT advantages is simply one of those benefits. No attempt has been made to prioritise this benefit from many of the other numerous benefits or advantages of using this type of retirement plan.

Equally to suggest that a QNUPS scheme could be “banned” is purely being sensationalist – unlike QROPS there is no QNUPS “list” and equally QNUPS is not a HMRC tax approval regime. A scheme either meets the basic criteria laid out in 2010/51 or it does not; so to suggest a scheme could or can be “banned” by HMRC is simply sensationalist. Of course in individual cases IHT protection may not be successful even though a QNUPS is used because of the individual circumstances surrounding the establishment of that structure, or due to the application of IHT anti avoidance measures by HMRC. However a scheme itself either meets the basic criteria to be considered a QNUPS or it doesn’t.

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