The planned changes to the tax rules applying to pensions and pension schemes have been modified by the Treasury following a public consultation.
The results of the consultation have been published, as well as details of the key changes to the initial proposals.
The initial proposals, that were set out in the consultation document, sought to achieve:
- simplification of the tax rules
- modernisation of the tax rules (including, in particular, the introduction of flexible retirement in the context of occupational pension schemes); and
- greater consistency between the tax rules applying to occupational pension schemes and to personal pension schemes, and between the tax rules applying to different forms of personal pension schemes, so that the tax incentives to transfer funds between pension schemes would be minimised
The consultation was launched in October 2013 and closed on 10 January 2014 by which time 41 written responses had been received. Those responses represented a good cross-section of the pensions industry including independent financial advisers; pension administrators; annuities providers; actuaries; lawyers and accountants interested in pensions issues; pension scheme trustees and interested individuals.
Overall there was a general agreement among respondents that the proposed new rules represented a significant simplification and that the introduction of greater flexibility into the pension rules would be welcome. However views on the detail of some of the proposed change were more wide-ranging and some of the initial proposals were challenged.
The Assistant Minister for Treasury and Resources, Deputy Eddie Noel, said: “I would like to thank those individuals and organisations that took the opportunity to respond to the consultation document. The quality of the responses and level of detail that they contained demonstrated that the consultation document had resulted in a great deal of thought by the respondents.
“Having reviewed the responses, we are proposing a number of changes to the initial proposals that will give greater flexibility to pension savers, whether they are a member of an occupational pension scheme or save in a personal pension scheme. In addition, to give Islanders greater confidence in their pension savings, we will commence work with the Jersey Financial Services Commission to develop a pensions regulatory function within the commission.”
The necessary amendment to the Income Tax Law will be lodged with the States in July 2014 as part of the 2015 Budget, with the changes becoming effective, assuming States’ approval, from 1 January 2015.
Category: Finance & Business