Isle of Man Passes Offshore Pensions Legislation

Jason Gorringe, Tax-news.com, London

28 April 2000

The Isle of Man has created a bespoke pensions regime which it hopes will attract international companies offering retirement benefit packages and schemes to expatriates and companies employing them.

Schemes offered from insurers in high-tax countries may give some tax benefits, but suffer from the lack of flexibility inherent in national pensions legislation. With more and more individuals and companies basing themselves internationally there is a growing market-place for offshore pension prevision, and this is the market which the Isle of Man has set out to capture.

The Retirement Benefits Schemes Bill 2000 passed through the Legislative Council on April 18th, and now just needs 'rubber-stamping' in London. It will go into force in June 2000.

Here is the text of a Press Release issued by the Isle of Man Government:

19th April 2000

ISLE OF MAN RETIREMENT BENEFITS SCHEMES BILL
PASSED!!!

The Isle of Man Government Insurance and Pensions Authority is delighted to announce that the Bill has now successfully passed all stages in the political process.

The deliberations concluded in the Island's upper house, the Legislative Council, on Tuesday April 18th 2000.The Bill received the unanimous support of the Council.

The Authority's Chairman, Norman Radcliffe MLC commented in his concluding remarks that, "this legislation is hugely important to the Isle of Man both in terms of the domestic scheme population and the development potential for international arrangements. The Authority has participated in many meetings with high quality companies interested in providing services or products to take advantage of this fresh opportunity. This can only provide more choice for local residents and strengthen the growing reputation of the island as the centre for international pensions.

The Bill now requires a grant of Royal Assent from the U.K. Home Office. It is anticipated that this will be granted in June 2000.

INTERNATIONAL REGULATIONS

In May 2000, the Authority will issue a third consultative document. This document will focus upon the detailed requirements for international retirement benefit schemes. This is a new market and therefore it is not anticipated that transitional provisions will apply.

The Authority is keen to ensure that the consultation period is of a sufficient length to enable full participation by all interested parties. Therefore the consultation period will be for a period of two months. The domestic scheme regulations will be issued in summer 2000.

The Chief Executive of the Authority, Dr Bill Hastings, said upon reaching this landmark stage.

"I am very pleased with the political support that this Bill has received from both Houses and the market. As time has passed, it has become clear that, the Government decision to create a bespoke of Isle of Man framework for pensions has been justified. The world market for pensions has exploded as the 'state' withdraws and it is likely that many jurisdictions will be unable to react effectively. The Isle of Man however, is perfectly poised to capitalise upon the potential for international business.

The Retirement Benefits Schemes Bill 2000 is the Islands passport to becoming the jurisdiction for pensions.

For my part I would like to thank all those who have participated and hope that they will continue to provide their valuable input during the next stage of consultation".

For further information, please contact:

Ian Foster, Pensions Executive
Tel: +44 (0)1624 646000
e-mail: Ifoster@ipa.gov.im

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