Should you transfer your pension to the Isle of Man or Guernsey? You need to find a QROPS specialist to answer the question effectively. There have been some recent regulatory changes on the Isle of Man that will make the Isle of Man more competitive in attracting QROPS pension transfers.

The Isle of Man parliament, Tynwald, recently made adjustments to the tax treatment of pension plans and the Income Tax (Pensions) (Temporary Tax) Order 2010 came into effect on October 22. Section 50B and is effective for international corporate and personal pension plans, available to non-residents of the Island.

The 50C schemes are open to residents and non-residents. QROPS under the 50c scheme means that you create a new type of TEE pension scheme:

• There is no tax allowance for contributions (T)
• Tax exemption (E) on the return on investment in the scheme, and
• Tax exemption (E), that is, without deduction of taxes, on authorized benefits paid according to the rules of the scheme, and this also applies to benefits paid as pensions, as lump sums and on death.

So the QROPS schemes carried over to these tax rules on the Isle of Man mean that a pension will be paid gross without deducting taxes. A 30% lump sum can be taken up front, zero inheritance tax will be imposed, so the full pension will be transferred to your partner or children and you will have the flexibility to determine the nature of your retirement.

Even better than that, the new rules only stipulate that the member use 70% of their pension fund to provide a pension. So if someone has a pot of £ 200,000, only £ 140,000 should be used to provide a pension income. So if you have a £ 200,000 starting pot that you invest in low risk funds growing at 5% per year for 20 years, then that will give you a £ 530,000 pension pot. But, only £ 140,000 should be used as pension, which means that the member has £ 390,000 that he can take as a lump sum.

Therefore, 100% of the return on investment + 30% of the original can be taken as a lump sum, which provides a massive incentive to enter this type of QROPS scheme instead of a SIPP (Self-Invested Pension Program ) or Guernsey QROPS. However, as always, there are certain caveats. Not all QROPS are the same. You should check the fees and charges for each individual QROPS scheme as they all have different charging structures and if you don’t need more access to a lump sum you may be better off on a Guernsey scheme with a cheaper fee. structure. The QROPS universe is changing all the time, so you really need to get in touch with an independent financial advisor who is a QROPS specialist.

These Isle of Man 50C QROPS plans have redefined the pension transfer possibilities for people who have worked in the UK. Contact the number above for more information.