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Newsletter | Articles Isle of Man Pensions – New Opportunities for UK Expats In April 2008 there were significant changes to Isle of Man pensions legislation which have led to new opportunities for non-UK residents who have UK based pension funds and for those who are considering leaving the UK. Island based pension providers have been quick off the mark to establish new SIPPs (Self Invested Personal Pensions) which have been given Tax Office approval as Qualifying Recognised Overseas Pension Schemes (QROPS). Each separate SIPP does not therefore require individual approval from HMRC if there is a master trust deed. Transfers from many types of UK pension schemes may be made tax free into Isle of Man QROPS. The advantages to a UK expat could be considerable, not least: Isle of Man pensions in retirement are paid net of 18 per cent income tax. Compare this to the UK where pension is paid out net of up to 40 per cent tax at source. Any further liability to income tax will depend on an individual’s country of residence in retirement. Tax on death in retirement: in the Isle of Man, if pension is distributed, there will be a one-off tax charge of 7.5 per cent to the fund; however no tax will be paid if the pension is transferred to another approved pension scheme, e.g. that of a family member. In the UK, after age 75 effective tax on death is now 82 per cent. Tax free cash from the fund is 30% compared to 25% in the UK Some benefits are available immediately, but in order to enjoy all the benefits you will need to complete five tax years of non-UK residency. There are other compelling reasons why UK expats should consider Isle of Man pensions as an investment and investigate the transfer of existing pension funds. For further information contact Stephen Colderwood.