A RATS – or Retirement Annuity Trust Scheme – is is a personal pension plan approved by both the Guernsey and UK Tax Authorities and is an ideal vehicle for pension planning for Guernsey residents.
A RATS is a highly flexible and tax efficient pension vehicle that is in essence a discretionary trust that acts as a self-administered pension scheme run in most cases by the corporate trustee. The schemes can be tailored to the individual’s lifestyle, pension needs and off er high levels of flexibility in terms of investment. Members can also transfer funds from existing pension schemes, ideal for anyone relocating to the island.
Benefits in summary:
* Wide range of asset classes which can include commercial and residential property
* No requirement to purchase and annuity
* Members can take a loan of up to 30% of the pension fund value
* No limit on the permitted level of contributions
* Contributions accumulate free of Guernsey income tax and any income derived is also exempt whilst remaining in the scheme
* Tax relief on £50,000 (or 100% of taxable income if lower)
* Unused tax relief can be carried forward for a maximum of six years
* Benefits can start to be drawn from the age of 50 to 75; therefore a member could continue to work whilst deriving an income from the RATS
* A lump sum of up to 30% of the fund value can be drawn at any point from the age of 50
* Should the member die prior to drawing any benefits from the scheme, the entire fund can be distributed with no income tax charge
Download our RATS product note HERE