Isle of Man Budget 2018 – Technical Summary

Isle of Man Budget 2018 – Technical Summary

Today (20th February 2018) at Tynwald, Treasury Minister, Alf Cannan MHK, announced his Manx Budget for the tax year 2018/19.

It contained some significant changes to existing private pension legislation on the island, including the introduction of a new form of Isle of Man pensions legislation, both to take effect 6th April 2018.

Outlined below is a summary of the key points made in today's budget.

Changes to Existing Legislation

  • Triviality/Fund Remnant Threshold Limit to be increased from £50,000 to £100,000 (this effectively means that it will be possible to cash-in a pension pot of circa £142,800 by first taking maximum TFC followed by a withdrawal of the remaining fund in full; or an even greater amount if maximum first year pension income is also deducted).
  • Annual Allowance for contributions to approved pension schemes reducing from £300,000 to £50,000 (tax relief available on any amount contributed up to 100% of IOM Relevant Earnings, subject to new annual cap of £50,000).
  • Isle of Man Financial Services Authority to issue guidance to local pension scheme providers/members in order to assist when considering the new pension options available.


New Legislation

The new legislation gives local pension scheme providers the ability to offer a new type of pension product, referred to as “Pension Freedom Scheme” (or PFS, for short) which will permit full access to the scheme funds once a member reaches a certain age and can accept transfers from existing approved pension schemes, subject to a tax charge.


The specific features of the new PFS are as follows: 

  • Minimum Retirement Age of 55 (except in special circumstances/incapacity grounds where an earlier retirement age may apply)
  • No Maximum Retirement Age
  • Tax-Free Investment Roll-Up
  • Maximum Tax-Free Pension Commencement Lump Sum (PCLS) of 40% of the value of the fund at time of payment
  • Maximum PCLS is a one-off payment opportunity i.e. it is not possible to take partial tax-free lump sum payments by creating tranches (or “arrangements”) within the scheme
  • Remaining 60% balance of fund can be accessed flexibly, either as a further lump sum or series of benefit payment withdrawals, all of which will be treated as taxable income at the individual’s marginal rate of IOM tax
  • No tax due on death (subject to residual fund being paid out within 2 years since death of member)
  • Annual Allowance for contributions set at £50,000 (tax relief available on any amount contributed at the individual’s highest marginal rate up to 100% of IOM Relevant Earnings, subject to annual cap of £50,000)
  • Transfer fee of 10% of transferred fund imposed for transfers into new PFS from existing IOM approved pension schemes
  • Transfers of defined benefit pension schemes or statutory schemes approved by Tynwald into new PFS will not be permitted
  • Transfers from UK (or other non-IOM pension schemes) into new PFS will also not be allowable
  • An individual is only able to be a member of one PFS at any one time


Provisions are also being made in order to address recycling of pension funds in the following form: 

  • Funds withdrawn from a PFS cannot be paid into another PFS
  • Tax relief will not be granted on the re-contribution of funds previously withdrawn from an approved pension scheme
  • Tax relief will also not apply to a contribution made to a scheme approved under the 1970 or 1989 Income Tax Act if such contributon consists of funds withdrawn from another approved pension scheme.


escort-london 29/09/2019 11:07pm (17 days ago)
Have you ever considered about including a little bit more than just your articles?
I mean, what you say is valuable and everything. But imagine if you added some great pictures or
video clips to give your posts more, "pop"! Your content is excellent but with pics and clips, this blog could undeniably be one of the greatest in its field.

Wonderful blog!
ABCya games
ABCya games 15/09/2019 11:26pm (31 days ago)
Hi, i read your blog occasionally and i own a similar
one and i was just curious if you get a lot of spam remarks?

If so how do you reduce it, any plugin or anything you can advise?
I get so much lately it's driving me crazy so any assistance is
very much appreciated.
Stevbots 08/09/2019 9:36pm (38 days ago)
Finasteride Online Canadian Pharmacy Meilleur Site Achat Cialis Buy Now Progesterone <a href=>viagra</a> Is Fish Amoxicillin Safe For Humans
Stevbots 03/09/2019 9:10pm (43 days ago)
Canadian Pharmacy 1 <a href=>cialis 5mg</a> Provera 5mg Tab Effexor Canada No Prescription
EllJala 21/08/2019 11:14pm (56 days ago)
Viagra Valor Viagra Come Comprarlo <a href=>cialis prices</a> Levitra Da 5 Mg Prezzo Inhouse Phyarmacy Teilbar Levitra Rezeptfrei
Salesforce Gadget
Salesforce Gadget 04/07/2019 12:20am (3 months ago)
Wonderful beat ! I wish to apprentice while you amend your website, how could i
subscribe for a blog site? The account helped me a acceptable deal.
I had been a little bit acquainted of this your broadcast provided bright clear concept 10/06/2019 9:10pm (4 months ago)
I got this web site from my friend who shared with me regarding this web site and now this time I
am browsing this website and reading very informative content
at this time.
viagra generic name
viagra generic name 05/06/2019 5:08pm (4 months ago)
On their final trading day, Anacor shares traded for $99.20 each, giving Anacor a market capitalisation of $4.5 billion. <a href="">cheap viagra online</a> Been given to healthy subjects, and multiple daily doses of 330 mg of viagra food alergies.
generic viagra online
generic viagra online 05/06/2019 11:39am (4 months ago)
Quoted price subject to change without notice to correct errors or omissions. <a href="">canadian pharmacy viagra</a> However, suppression of airway reactivity and eosinophilic inflammation by increased intracellular cAMP could be beneficial in bronchial asthma as well.
generic viagra
generic viagra 30/05/2019 12:28pm (5 months ago)
A few weeks earlier, he’d cannibalized a volume of his own critical theory, baking it into a lasagna. <a href="">buy viagra</a> dexamethasone dosage for goatsImportant Note on Medication Dosages for Goats: Goats metabolize medications differently Dexamethasone is an anadrenal corticosteroid, a member of the Common Goat Medications and "Easy to Understand" Dosages Use in goats mostly limited to treating tapeworms; only product in this Dexamethasone.
generic viagra
generic viagra 28/05/2019 4:22pm (5 months ago)
Once areas of the anesthetic within the last rib and costal cage by freeing the diaphragm act to twist it about its efficacy being up for critical thinking, and have an abnormal relationship between the patient has been suspected that a substantial source of fever.,,, white females without ascertainable source of. <a href="">buy viagra</a> Although firm data are lacking, pre-Viagra treadmill test to assess for the presence of stress-induced ischemia can be helpful.
boekhouder zzp breda
boekhouder zzp breda 27/05/2019 12:04am (5 months ago)
Very shortly this web site will be famous amid all blog viewers, due to it's fastidious posts
how to get help in windows 10
how to get help in windows 10 26/05/2019 8:37pm (5 months ago)
This piece of writing is really a pleasant
one it assists new web people, who are wishing for
Jerrybit 22/05/2019 8:14am (5 months ago)
erectile discharge
<a href=>ed drugs list</a>
youth erectile dysfunction
<a href="">best erectile dysfunction medication</a>
how to get help in windows 10
how to get help in windows 10 22/05/2019 2:43am (5 months ago)
Greetings from California! I'm bored to tears at work so I decided to browse your website on my iphone during lunch break.
I enjoy the info you present here and can't wait
to take a look when I get home. I'm amazed at how quick your blog
loaded on my phone .. I'm not even using WIFI, just 3G ..
Anyhow, fantastic site!
gamefly free trial
gamefly free trial 21/05/2019 5:10am (5 months ago)
The other day, while I was at work, my cousin stole my iPad and tested to
see if it can survive a 40 foot drop, just so she can be a youtube sensation. My apple ipad is now broken and she
has 83 views. I know this is totally off topic but I had to share it with
gamefly free trial
gamefly free trial 20/05/2019 2:00pm (5 months ago)
Fantastic goods from you, man. I have be aware your stuff prior
to and you are simply extremely great. I actually like
what you have bought here, certainly like what you're saying and the best way by which you assert it.
You are making it enjoyable and you continue to care for to stay it
wise. I cant wait to read far more from you. This is actually a terrific website.
Bbokaqdzet 19/05/2019 10:21pm (5 months ago)
The more cGMP in your bloodstream, the more the muscles can relax and more blood can flow into your penis to give you a better the erection. <a href="">does prescription part d cover viagra</a> Wiesaw Jakubczak, Doradca Zarzdu Artbale, prawnik, specjalista do spraw ngo.
Matdyporb 12/05/2019 2:00am (5 months ago)
Cephalexin History <a href=>cialis vs viagra</a> Propecia Colesterol Prezzo Di Viagra
cialis 06/05/2019 11:28pm (5 months ago)
Incredible points. Solid arguments. Keep up the amazing work.
Cialis 01/04/2019 2:06pm (7 months ago)
Generally I do not read post on blogs, but I would like to say
that this write-up very compelled me to check out and do so!
Your writing taste has been surprised me. Thank you, quite
great article.
John Cowley
John Cowley 26/03/2018 8:49am (19 months ago)
Is there likely to be any movement on the 10% transfer fee. 10% charge to then be taxed at 20% if you draws down whilst working will surely put anybody off accessing their pension fund whilst working or even after.
Boal & Co
Boal & Co 27/02/2018 6:28pm (20 months ago)
Hi Simon. Thanks for your query.

After the 40% tax-free lump sum, the remaining 60% balance of the fund will be taxed at your marginal rate (not necessarily a flat rate of 10%). However, yes, if over age 55, it would be possible to cash in the entire consolidated fund within the new PFS. There would though be a 10% transfer fee applicable to each of your respective IOM pension plans upon transfer into the new PFS to obtain the ability to cash in the plan in full.

In addition, a transfer to a SIPP under the existing legislation or the new PFS on or after 6th April 2018 will negate the requirement to purchase an annuity. Benefits in retirement will instead be taken via drawdown.

Hope this is helpful for you.
Simon 26/02/2018 9:43pm (20 months ago)
I have three IOM pension plans and am about to draw them down. Am I correct in taking it that under the new PFS I can cash all funds in (being over 55) with 40% tax free and the remaining 60% taxed at 10%, and this can all be done by intructing the pension plan trustees directly? also that this also negates the previous necessity on some plans to purchase an annuity?
Boal & Co
Boal & Co 26/02/2018 5:37pm (20 months ago)
Thanks for your query Jaks.

The new Pension Freedom Scheme (PFS) is not replacing the existing legislation, but rather providing an alternative option to the existing legislation.

As such, there will be no requirement for you to incur the 10% transfer fee unless you wish to transfer your existing personal pension plan into the new PFS to gain access to the higher tax-free lump sum and additional flexibility on the balance of the fund.

Hope this helps.
Jaks 26/02/2018 2:51pm (20 months ago)
Will the PFS replace SIPPS? I have built up a significant personal pension through my employment and I'm loath to just hand over 10% to the Assessor

Post your comment