Frequently Asked Questions
- What type of pension fund can be transferred to a RATS?
Most pensions can be transferred to one sort of RATS or another; this will depend on the circumstances and requirements of the ceding scheme.
- Who is eligible to join the a RATS?
RATS are open to anyone over 18 years of age and normally under the age of 75 years.
- What is the maximum or minimum contribution I can make?
There is now no limit on the contribution amounts into a Guernsey retirement annuity trust scheme, though Guernsey Income Tax have set parameters with regard to the amount of contribution that will receive tax relief.
Contributions and allowances under the Guernsey Income Tax Law can be summarised as follows:
- Section 157A & 150 schemes: Tax relief is currently available on member contributions into pension plans / RATS up to the lesser amount of £50,000.00 or 100% of a member’s taxable income per annum. The rules relating to this are published on the Guernsey Income Tax website at www.gov.gg.
- Section 157E & 40ee: These schemes do not offer tax relief on contributions, but all benefits are paid gross, free of Guernsey Tax.
While there is technically no lower limit, a Gower Bespoke RATS is most suited for pensions worth £50,000 or more.
For schemes below £50,000 you may wish to consider the Horizon Guernsey Pension Plan.
- How can benefits be taken?
While there is flexibility about how benefits are taken, the Trustees would look to ensure that benefits are drawn at a level to try and ensure income is provided throughout a member’s retirement. For further information please refer to Payment of Benefits on particular pension offering.
- At what age can benefits be taken from the RATS?
This will normally be defined in the deed based around the parameters of the schemes approval/acceptance/exemption.
- Section 157A & 150: From age 50 (unless ill health would apply) and normally the latest being age 75 (or as the law may allow and as may be amended).
- Section 157E: From age 55 with no defined upper age in law, though normally by age 77 years in line with scheme approval and acceptances.
- Section 40ee: There is discretion on the retirements period which will normally be agreed on establishment.