UK - Consultants are reminding firms to take advantage of new tax breaks on pension contributions which take effect next year.
The Double Taxation Convention is designed to ease pension problems for companies which transfer employees between Britain and the US.
The new convention will allow seconded employees to remain in their home country’s pension arrangement without suffering adverse tax consequences such as double taxation.
Employers may also be eligible for tax relief on contributions to UK schemes.
Lane Clark & Peacock partner and international benefits specialist Christine Whatley urged employers not to miss out on the changes.
She pointed out that, from a pensions perspective, the US had always been problematic for UK citizens working abroad.
She added: “This new treaty brings important benefits for UK pension scheme members working in the US and vice versa.
“It is important for employers to consider how best to treat new secondments and the implications for existing solutions in place under the old convention.”
LCP said the new tax convention also eliminated the 15% withholding tax paid on dividends derived from investment, which would be another benefit to schemes.
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