Guernsey's government has made a technical law change which officially confirms de facto practice that international savings plans are classified as falling within scope of the island's pensions regime for taxation and supervision, and to clarify that income paid from an international savings plan is exempt from tax.
International savings plans are aimed at benefitting employees of multinational and international companies. Such plans must have for their sole purpose the provision of benefits in respect of the persons' employment wholly outside Guernsey in a trade or undertaking. They must be established under the law of Guernsey and must also be administered by licensees subject to regulation by the Guernsey Financial Services Commission.
The clarity has been welcomed by Guernsey pension providers. Schemes recognised by the Guernsey Revenue Service under Section 40(nn) of the Income Tax Law are regulated, and any which do not are not regulated.
Following the law change an amendment to the definition of gratuity scheme within the Guernsey Fiduciaries Law is required.
The Amendment to the definition of gratuity scheme may impact the scope of the application of the Fiduciaries Law to those conducting the formation, management or administration of gratuity schemes by way of business.