Q Can a
member of a s615(6) Trust also be a member of a UK registered
The Inland Revenue permit an individual who is working overseas
to remain in the UK pension of his employer. This does not
conflict with membership of a s615(6) Trust as membership
may be concurrent.
Q Can a UK tax resident
be a member of a s615(6) Trust?
A Yes, but only in
respect of overseas duties and only if any duties conducted
in the UK are incidental to those overseas duties. In practice,
this is fairly difficult to achieve.
Q Why should an individual
wish to become a member of a s615(6) Trust if he is already
a member of a UK registered pension scheme?
A There are several
very good reasons:
- An annual and lifetime allowance applies to the
UK scheme, restricting the total benefits which may be payable
without draconian tax consequences. The s615(6) Trust is
a tax efficient way of overcoming this problem as it operates
outside the annual and lifetime allowance regime and suffers
no maxima of its own.
Lifetime benefits paid from a UK Registered scheme are subject
substantially to income tax. Contributions paid into a s615(6)
Trust could be taken as a tax free lump sum payment in the
- The UK scheme benefits may be satisfactory, but
the overall remuneration package may be exposed to undesirable
levels of local tax and social security payments for both
employer and employee. A s615(6) Trust could be an ideal
tool to mitigate such a problem where individuals have income
surplus to living requirements and the employer would prefer
to structure the package in a more cost effective way.
- Assets held in a s615(6) Trust which exceed retirement
needs can remain outside of the indivdual's estate and would
not therefore be liable to Inheritance Tax. The
s615(6) Trust could, therefore, also be used as an estate
Q Can the benefits
be taken outside the UK?
A Yes. The taxation
of lump sum benefits taken outside of the UK will be determined
locally. This does not mean benefits will automatically
be taxed. However, specialist advice would need to be taken.
Q Can a self employed
individual become a member of a s615(6) Trust?
A No. However, creating
a UK employment structure or joining an umbrella employment
structure is often a perfectly viable alternative to self
employment. For company formation and umbrella administrative
services contact s615(6) Trustees Limited.
What does The s615(6)
Fee: 1.25% per annum of The Trust Assets. By arrangement
this fee can be deducted at source from The Trust Assets.