What are International Savings Plans?
Jersey International Savings Plans (“ISPs”) are new tax neutral, savings plan aimed at benefiting non Jersey resident employees of multinational companies or family offices.
They enable a pay-out to employees when their employment ends or on the occurrence of a major trigger event which might include releasing equity for property purchases, redundancy, ill health or divorce.
This flexibility makes an ISP more attractive than a pension scheme because they allow a pay-out to employees before the minimum pension age.
What are the key features of an ISP?
An ISP must be established under an irrevocable trust under Jersey Law by an employer who is not resident in Jersey.
An ISP has trustees (either two or more individuals or a corporate) who are regulated by the Jersey Financial Services Commission.
An ISP is not a scheme which comes within the pensions framework under Jersey tax legislation.
How is an ISP treated for tax purposes?
Any income derived by the ISP, such as gains on investments, will not be taxable in Jersey. Distributions to non-resident members will also be exempt from tax in Jersey.
Pinel Advocates can assist with the set up of International Savings Plans for clients.