Jersey Publishes Guidance On Pensions Changes
by Jason Gorringe, Lowtax.net, London
03 February, 2015
Jersey has published guidance explaining changes to the taxation of pensions following rule changes that became effective at the beginning of this year.
The changes, agreed in September 2014 as part of the 2015 Budget, were made to simplify and modernize the tax framework and allow savers greater flexibility on pension contributions. According to the Government, the changes mean that:
- Members of occupational pension schemes are no longer required to make an all-or-nothing decision between remaining in employment or retiring and drawing a pension from the scheme;
- Pension schemes will be allowed much greater flexibility over how they pay the 30 percent tax-free lump sum;
- Individuals who can demonstrate that they have "minimum retirement income" will be allowed to access approved drawdown contracts, where they have complete control over when they take payments from their pension fund, even if they have already taken a tax-free lump sum; and
- Transfers of funds will be allowed between pension schemes in a broader range of circumstances.
Alan Maclean, Jersey's Minster for Treasury and Resources, said: "These changes create a modern and flexible framework for such pension schemes in Jersey and give providers the opportunity to be much more flexible in the benefits that they will pay. Pensions are notoriously complicated, and we hope that the leaflet and information on the government website will give people an idea of how tax rules are applied to their pension savings. If they then have specific questions about their pension scheme they should contact their pension provider."
See all of today's news