Pensions

Some years ago, the Isle of Man exercised foresight by developing its pensions legislation to encourage high calibre pensions business to the Island. This business firstly encouraged diversification in the finance sector and secondly, provided a framework which would enable multi-national or global businesses to use the Isle of Man as a centre from which to manage retirement benefits schemes for employees resident anywhere in the world. The Island also sought to encompass domestic pension arrangements available to Isle of Man residents and, in order to address the needs of two diverse markets, the Retirement Benefits Scheme Act 2000 was put in place. Under the Act, separate regulations have been introduced, catering for international and domestic schemes.

In April 2008, the Income Tax (Pensions) Act 2008 saw very positive updates to pensions tax legislation following significant consultation with industry players. The Act has provided much more flexibility in the way pensions can be taken, for instance, maximum lump-sum limits have been increased to 30% of pension fund value (previously 25% for personal pension schemes). Significantly, the new legislation allows pension scheme members to take a lump sum without having to commence payment of a taxable stream of pension income. This latest initiative highlights the Isle of Man’s intention, as an international finance centre, to be in the vanguard of change.

The Island has many specialist providers, coupled with legal and taxation services, to attract quality business.