International Savings Plans (sometimes referred to as gratuity schemes) are single centralised savings arrangements setup and managed from a jurisdiction such as Guernsey or the Isle of Man.
ISPs are typically utilised by multinational employers who wish to provide relevant employees with a savings plan as part of their overall benefits package. Relevant employees can include highly transient employees who move between countries or longer term expatriate employees operating outside of their home country.
ISPs are also utilised by employers who have populations of employees located in countries where there is no recognised pension framework, including developing countries and emerging markets.
An ISP will have certain rules that determine how and when an employee is eligible to take benefits from the plan and this would typically include entitlement on certain events, such as leaving service or achieving a certain number of years with the company etc.
ISPs are generally flexible enough that members can choose how they wish to receive their benefits, although this would typically be by way of a one off lump sum payment.
ISPs setup and managed from Guernsey and the Isle of Man both benefit from being able to make payments to non-resident members without the deduction of any local withholding taxes, resulting in a tax-exempt savings plan whereby members sole consideration for tax liability will be in their country of tax residence at the time of receipt, i.e. no double taxation.
IPPs and ISPs setup and managed from Guernsey and the Isle of Man also benefit from a dedicated regulatory framework ensuring the highest levels of security, governance and supervision.