Offshore Pension Trusts and Other Employee Benefit Schemes

International Pension Trusts

With the increasing mobility of labour, providing a tax efficient pension scheme for employees can prove difficult. Often regulations in the home country of the parent company limit the period overseas employees can remain in the parent's own scheme and, therefore, such employees often become members of local schemes or are left to make their own arrangements. In circumstances where an employee belongs to a number of schemes due to the fact that he has undertaken various assignments in different countries, pensions may become fragmented and subject to withholding taxes in a country where the employee no longer resides.

A solution being adopted by a number of multi-national companies is the establishment of an international pension trust in a jurisdiction such as Guernsey which has modern pension provisions within its tax and trust laws but does not impose any withholding taxes on the payment of pensions from approved schemes.