Tax & Accounting News

New Tax Deal With Jersey Over Pensions

21/12/2009

The Tax Information Exchange Agreement (TIEA) signed between Jersey and the UK came into force on 27 November, bringing about a major change to the taxation of pensions.

Previously, Jersey residents receiving a UK pension and UK residents receiving a Jersey pension were often required to pay tax under both jurisdictions, but the TIEA brought an extension to the existing Double Taxation arrangements.

This amounted to particularly good news for Jersey residents, who may have been paying tax rates of up to 40% (rising to 50% from next year), but can now apply to HM Revenue and Customs (HMRC) to have their UK pension paid to them without deduction of UK tax.

UK residents in receipt of a Jersey pension can similarly apply to the Comptroller of Income Tax in Jersey to have their pension paid without deduction of Jersey’s 20% flat income tax rate.

For more information please contact us.