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Personal Pension Schemes

Tax relief for pension schemes approved under the Income Tax Act 1989 is given through the employee’s tax code and not at source through the payroll.

Personal pensions – Tax relief through tax code:

  • Once an employee commences to make personal pension contributions into a personal pension scheme, they should inform the Income Tax Division and provide an estimate of the personal pension contributions they intend to make during that appropriate tax year
  • The employee’s code will be altered by the Division to include an estimate of these pension contributions
  • Tax relief is given when the code (containing the pension contribution estimate) is applied to the employee’s gross remuneration
  • At the end of year the employee should be given a certificate by the pension provider to include with their Isle of Man tax return
  • The certificate should confirm the name of the Isle of Man pension scheme; the tax legislation the pension scheme is approved under; the tax year the certificate covers; the amount of employee contributions made into the pension scheme and the amount of employer contributions made into the pension scheme
  • The employer should not include personal pension contributions made into a scheme approved under the Income Tax Act 1989, in Box B of the T14
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