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20/03

Skandia International teams up with Fairbairn to offer co-branded QNUPS for UK investors

Skandia International, the offshore business of Old Mutual plc, today announces it has teamed up with another Old Mutual group company - Guernsey based Fairbairn Trust Company, to offer a packaged QNUPS (Qualifying Non-UK Pension Scheme) solution aimed at UK resident investors. This is the second co-branded QNUPS offering which features Skandia International’s offshore bonds, having recently announced an arrangement with Concept Trustees, targeting non resident UK domiciled investors.

20 March 2012

Skandia International, the offshore business of Old Mutual plc, today announces it has teamed up with another Old Mutual group company - Guernsey based Fairbairn Trust Company, to offer a packaged QNUPS (Qualifying Non-UK Pension Scheme) solution aimed at UK resident investors. This is the second co-branded QNUPS offering which features Skandia International’s offshore bonds, having recently announced an arrangement with Concept Trustees, targeting non resident UK domiciled investors.

The arrangement, known as QNUPS One, can be used as an alternative or additional pension solution which also benefits from inheritance tax exemption.

Although there is no tax relief on contributions, there are many advantages to using a QNUPS arrangement. For example there is no limit on contributions made into the scheme and the source of funding need not come from employment related income. The arrangement is classed as an overseas pension and is therefore subject to the foreign income pension rules. It provides the ability to take a lump sum payment of up to 30% of the fund size, there is no requirement to purchase an annuity and there are no reporting requirements to HMRC. By utilising an offshore bond, the arrangement is exempt from capital gains tax on investment growth, other than withholding tax, plus there is no lifetime limit on the fund size. Most crucially, the scheme sits outside the UK inheritance tax rules.

In order to qualify as a QNUPS, a scheme must meet certain conditions such as being recognised for tax purposes in the jurisdiction in which it is provided, the investment is locked in until retirement age, which is currently 55, and by being available to the local population in the jurisdiction it is based in, for example in Guernsey.

This arrangement would be most attractive to people domiciled in the UK who are saving for retirement, are UK residents and who have already utilised their maximum income tax relievable pension contributions or are at risk of breaching the lifetime limit.

The QNUPS One arrangement is offered at a one-off initial fee of £975 plus an ongoing annual fee of £975. Additional transfers are subject to £150 one-off charges and a £1000 fee is charged on exit.

Rachael GriffinRachael Griffin, head of product law & commercial development at Skandia International comments:

‘Due to the nature of changes introduced to the Pension regime in the UK such as the limits imposed on the annual allowance eligible for tax relief and the forthcoming reduction in the Lifetime Allowance from £1.8m to £1.5m on 6 April 2012, it is not surprising that investors are seeking alternative tax efficient solutions to fund their retirement provisions. QNUPS One can be successfully utilised to overcome these concerns, as the scheme allows uncapped contributions, the use of an offshore bond wrapper providing a CGT friendly environment and most crucially, the arrangement is exempt from UK Inheritance Tax.

‘The joint capabilities of the investment offering from Skandia International and the financial planning expertise provided by Fairbairn Trust company, both backed by their FTSE 100 parent, has enabled us to bring a truly compelling proposition to customers.’

Nathan Lihou, chief operating officer at Fairbairn Trust Company adds:

'We are delighted to be working alongside Skandia International and see this as the start of QNUPS entering the mainstream of financial planning. Together, we will be providing financial advisers and wealth managers with a first-rate, tax efficient and innovative solution to compliment their current portfolio of wealth planning arrangements.'

This press release is for journalists only and should not be relied upon by financial advisers or customers.

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