News
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Global Pension Boost
International pensions will provide a boost to the Island's finance industry in the wake of legislation passed by the Manx government, according to law firm Simcocks.
The Retirement Benefits Schemes Act 2000, which came into force in 2002, has enabled the firm to build a pension product for multinational corporations, especially those based in offshore environments.
It is already taking inquiries for the provision of pension arrangements for an international hotel chain, a global construction company and other well-known worldwide brands from as far afield as Dubai, Africa and the British Virgin Islands.
Tim Boles, managing director of Simcocks Pensions, said: 'We can offer something which no one else has but which other offshore jurisdictions will surely copy — a pension in a currency of your own choice in a triple-A rated jurisdiction where there is absolutely no tax taken by the government.'
Simcocks Pensions offers four basic products encompassing a domestic and international version of both corporate and personal pensions. Mr Boles said the future for the Island lies in international corporate pensions because the growth in uptake will generate business for many Douglas-based fund managers.
He said the strategy of zero taxation on capital gains or withdrawals from the pension funds is the right move and will pay big dividends for the economy.
He said: 'I went along to see the assessor of tax and asked him why he was doing this, as I couldn't see the benefit to the government. He said: "I just want businesses like yours to get going and pay your national insurance and your VAT."
It is a brilliant idea and a good way of looking at things. People can't believe that there is no tax, but there isn't.
'It brings more money in, keeps the fund managers employed and attracts more businesses in the same way as the shipping and funds industries have proved.'
The company has set up intermediary agreements all over the world with IFA's and investment houses, and the idea is to use this network to facilitate the management of funds within the pension.
In the short term, domestic personal pensions could become popular, in response to the new taxation measures for pensions currently being implemented in the UK by Gordon Brown.
Although domestic rules require Isle of Man residency, the substantially lower taxation liability may persuade more people living in the UK to retire to the Island.
'People with a very large UK-based pension pot that they have saved all their lives to build are going to find it an attractive proposition to move to the Island and take advantage of the domestic schemes available,' he added.
Copy of article - Isle of Man Examiner 14 September 2004
Used with permission
