New residents on the Isle of Man can overlook the opportunity to transfer their UK pensions rights to a locally approved pension scheme. This can be a mistake, as such transfers can lead to substantial tax and capital preservation advantages.
It is possible for an Isle of Man resident to have UK pension income paid gross and taxed only in the IOM. Where an IOM resident dies in receipt of a UK pension, 55% of the residual fund can, however, be payable to HMRC. The IOM tax rate on residual funds is only 7.5%, so it can be a very costly oversight for an Isle of Man resident to leave pension benefits in the UK. Isle of Man pension schemes can also offer additional advantages, such as the ability to take greater tax-free lump sums in certain circumstances. Residents who are already paying the tax cap on their personal income (currently £120,000) can also draw their pension benefits without further tax liability.
Isle of Man Pension schemes can be registered with HMRC as Qualifying Recognised Overseas Pension Schemes (QROPS). The pension schemes we offer are fully QROPS compliant and can be tailored to meet the needs of each client. For substantial pension funds a ‘self-administered’ scheme, written under trust, allows clients to maintain control of their capital, select their own investments and ultimately preserve their wealth for future generations, all in a very cost efficient manner. See Isle of Man SIPPS.
We are happy to meet with potential clients and professional advisors, without cost or obligation. Contact us to investigate whether Fedelta pension planning could help you.
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