What happens on my death?

On death before or after commencement of drawdown pension, the member’s SYNERGY fund can be paid out as a lump sum to the beneficiaries nominated on the member’s application form. Provided you are not Guernsey-resident, there is no Guernsey tax payable on this death benefit.

Alternatively, there is the ability for funds to be retained within SYNERGY and applied to provide an immediate drawdown pension to the member’s spouse.

Members are able to indicate their preference in the Expression of Wish section of the SYNERGY application form.

What is the taxation position?

In relation to taxation in the Channel Islands, the position is different for non-residents and Channel Island-residents, and is summarised below.

Non-residents

• Provided members are not resident in the Channel Islands, all retirement pension and lump sum benefits described above are exempt from Guernsey tax under section 40(ee) of the Income Tax (Guernsey) Law 1975.
• There is no taxation relief on contributions payable into SYNERGY.
• Channel Island-residents
• If a member is Channel Island-resident, then taxation on pension benefits will apply, as will tax relief on contributions. Please contact the Scheme Administrator for details.

Even if benefits are paid to you free of Guernsey tax, you may have a liability to tax in your country of residence. Tax rates vary widely from one country to another, and you are advised to take local tax advice and to declare SYNERGY pension income on your annual return.

It is a legal requirement and obligation of any QROPS, including SYNERGY, that the Scheme Administrator reports to HMRC in certain situations when a member benefit begins to be paid. The reporting obligation does not apply unless a member is UK-resident at the time of payment, or has been UK-resident in any of the preceding 5 tax years. The reporting obligation applies only to the first such payment, and extends to the date, amount and nature of that payment, together with the name and address of the member. Note that the 5-year period is measured from when you left the UK, not from when your pension transfers into SYNERGY.