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IoM Details New Pension Schemes

Monday, November 1, 2010

The Income Tax Division of the Isle of Man Treasury have published three practice notes providing guidance on changes to the islandís pension schemes.

The first practice note, PN 164/10, announces details of the newly-launched '50C scheme', a new type of pension scheme, which is to be open to both the domestic pension market and to international investors, as approved by the Isle of Man parliament, the Tynwald, on October 19. PN 164/10 in particular details the schemeís characteristics including its tax treatment, and the implications of the scheme accepting contracted-out/protected rights transfers.

The Divisionís second Practice Note, 165/10, provides an update on Ďapproved pension schemesí, in particular with respect to updated provisions in relation to:

  • Pension transfers;
  • The tax treatment of funds remaining in a scheme on the death of the member; and,
  • The value of memberís benefits for the purposes of calculating a lump sum payment.

The last Practice Note, 166/10, addresses a number of investment issues, including:

  • An outline of the basis on which the Assessor decides whether or not an investment may be approved;
  • Treatment of trading income;
  • Qualifying Recognised Overseas Pension Schemes (QROPS);
  • Permission for investments to be made without the Assessorís clearance;
  • Prohibited investments; and
  • Possible new regulations.