International Savings Plans (ISPs) are income tax exempt, flexible, savings plans aimed at benefitting employees of multinational and international companies.
Participants can benefit from ISPs before the normal minimum pension age (usually 50 or upwards) upon termination of employment and other major life events such as ill-health, redundancy or divorce, amongst others.
ISPs can be established in Jersey from 1 January 2019 and were designed by the Jersey Pensions Association with the backing of Jersey Finance.
• The Income Tax (Jersey) Law 1961 (the Income Tax Law) was amended to enact new provisions under Article 118D, providing for ISPs.
• Much like tax-approved pensions in Jersey, ISPs will be managed under rules set by the Comptroller of Taxes, through accompanying guidance notes.
5 things you need to know about ISPs
Set up - ISPs will take the form of Jersey irrevocable trusts, established in connection with a trade or undertaking, partly or wholly outside of Jersey, by a non-Jersey resident and can be tailor-made to suit the needs of an employer or employees
Management - ISPs do not have to be administered in Jersey, however, they must have at least one Jersey based trustee (with a minimum of two individual trustees or one corporate trustee)
Participants - There is no minimum number of participants and participants must be non-Jersey resident employees
Benefits - ISPs will hold and provide flexible benefits, free of income tax, in Jersey's well-regulated, reputable and politically stable environment
End of service benefits - ISPs are designed to link with existing end of service benefit plans and countries where employers may be legally obliged to offer such benefits
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.