EFRBS - Frequently Asked Questions
What is an EFRB?
An EFRB is an employer sponsored flexible retirement benefit arrangement which is permitted under UK tax law created on 6th April 2006.
Why is it different from a normal registered pension scheme?
A registered pension scheme follows the stringent rules for pension schemes in the UK, the EFRB is a retirement vehicle recognised by the UK but doesn't come under the restrictive legislation.
What is the STM EFRB?
Our EFRB is based in Gibraltar and receives income tax exemption in Gibraltar.
Why use an overseas EFRB?
An overseas EFRB has all the characteristics of a UK EFRB but also benefits from being advantageous if the employee is non UK resident when the benefits are taken.
Does HMRC recognise EFRBS?
Yes, EFRBS are included in the tax legislation. Although there is no requirement to register an overseas EFRB with HMRC it can be registered if required.
Has HMRC challenged EFRBS?
HMRC have only highlighted one area of EFRBS where they have concerns which is the early deduction of corporation tax, we would not recommend this. EFRBS do not need reporting as a tax saving scheme with HMRC.
What can an EFRB invest in?
There are no investment restrictions on the STM EFRB, accordingly the member can propose to the administrators investments that might not normally be permitted within a normal regulated pension scheme this may include residential property.
Can a loan be taken?
Yes, but there should be a commercial rate of interest paid.
Is there a maximum contribution?
No, the pension capping regulations for UK regulated schemes do not apply and contributions do not count towards the lifetime allowance.
When and how can I take my benefits?
As this is a retirement benefit scheme benefits should not be taken before age 55, if they are they could be subject to income tax. The benefits can be taken in one lump sum.
Why are EFRBS popular now?
The introduction of the 50% tax band and the restriction on relief to registered pension schemes means that EFRBS are the most tax efficient solution.
Does my employer need to be involved?
Yes, the scheme is set up and sponsored by the employer who should be registered in the UK which will offer the EFRBS to its employees.
Does the employer have control of the EFRB?
No, once the contributions are made they are held for and on behalf of the employee and are protected should the company go into liquidation.
STM Fidecs Pension Trustees Limited is regulated by the Gibraltar Financial Services Commission - License Number: FSC00845B
STM Fidecs Life, Health & Pensions Limited is regulated by the Gibraltar Financial Services Commission - License Number: FSC00996B
