NOVEMBER UPDATE: Guernsey pensions: Impact of new Ordinance on RATS set up as QNUPS
On 2 October 2015, the Income Tax (Pension Amendments) (Guernsey) Ordinance 2015 and the Income Tax (Pensions) (Contribution Limits) and Tax-free Lump Sums (Amendment) Regulations 2015 came into force to implement the proposals set out in Billet d’Etat XVI, giving rise to much press speculation about the impact for Guernsey.
Doom-laden critics have predicted that recently passed legislation portends a mass exodus from Guernsey pensions. Nicholas Donnithorne and Anna Gray look behind the hype.
On 2 October 2015, the Income Tax (Pension Amendments) (Guernsey) Ordinance 2015 and the Income Tax (Pensions) (Contribution Limits) and Tax-free Lump Sums (Amendment) Regulations 2015 came into force to implement the proposals set out in Billet d’Etat XVI, giving rise to much press speculation about the impact for Guernsey.
In a nutshell:
Some parties have predicted the demise of certain Guernsey pension schemes (RATS with transferred in UK tax-relieved funds) because, they say, even if the new Guernsey legislation permits greater flexibility, a RATS cannot offer the new flexibilities introduced in the UK and also be a QNUPS, but:
- This is not relevant for RATS that do not have funds transferred in from the UK (in practice most schemes established on or after 6 April 2015)
- Where there is an impact, this is limited: in many cases, there are steps the scheme can take to provide for the UK flexibilities under their schemes for members
