Jersey

The Comptroller of Revenue approves an employer's scheme that is a pension fund (in the Law's words, a superannuation fund) genuinely established under irrevocable trusts, or another scheme genuinely established, in connection with a trade or undertaking,¹ whose sole purpose is an income for life for people employed in it in Jersey and, after their death, their dependants.² The employer must contribute,³ and the scheme may let a person join or pay in only while an employee.⁴ Membership need not be open to all employees,⁵ a scheme several employers use must be a master trust,⁶ and a small scheme, one with fewer than 12 members, where members may also control the employer company, needs an independent trustee.⁷ Whether you pay in is for the scheme's rules: Revenue Jersey says a scheme may be contributory or non-contributory and that its rules control contributions.⁸ The scheme's investment income is exempt from Jersey tax,⁹ your contributions are deductible up to the lower of £50,000 and your relevant earnings (your pay and business profits), each less any income above £150,000,¹⁰ and the employer's ordinary annual contributions, fixed or worked out on a definite basis, are deductible as an expense.¹¹

Pension income must start between 50 and 75,¹² earlier only in ill health or in an occupation where people customarily stop work before 50,¹³ and you need not retire to draw it.¹⁴ If its rules allow, a scheme may let you take, on one or more occasions from 50 to 75, lump sums of up to 30% of the net fund value, free of Jersey tax;^15,16 the whole fund, if it is £10,000 or less and you no longer work for the employer that pays in, taxed at the 20% standard rate;^17,18,19 from 60, the whole fund, if it and earlier trivial commutations (whole funds taken as cash) total £50,000 or less;²⁰ the whole fund in serious ill health;²¹ and, if you have been a member for less than 5 years, have left the employer and have not started benefits, a refund of your own contributions and interest, taxed at 10%, which ends every other benefit.^22,23,24 Electing a lump sum from part of the fund counts as starting benefits,²⁵ so it closes the refund route, and a later serious ill-health commutation or death lump sum then bears Jersey tax at 10%.²⁶ On a member's death the scheme may pay dependants an income, and a lump sum to the member's estate or to any person,²⁷ free of Jersey tax if benefits had not started.²⁸ A pension is earned income from which the scheme manager deducts Jersey tax at the standard rate.²⁹

Approval is a tax approval: the Comptroller may withdraw it, and those it notifies then owe tax at 50% on the greater of the scheme's assets and its contributions with their income.³⁰ A Jersey employer's pension trust that is not approved, or whose approval has been withdrawn, has no block of its own; on the cautious course it takes this block's answers, except that Rev. Proc. 2020-17 is unlikely to cover it, since the Income Tax Law exempts the income of approved schemes only.^9,31

A foreign trust on our reading where set up under irrevocable trusts; for other approved schemes not settled, read the same way.

A foreign trust, on our reading, where the scheme is a superannuation fund established under irrevocable trusts:¹ its trustees are the scheme manager,³² its fund value is what has accumulated for each member, or for a defined benefit member the capital value of the benefits,³³ it may make payments only as the Income Tax Law permits,³⁴ and a deferred pension cannot be assigned or surrendered.³⁵ Trustees who take title to protect or conserve property for beneficiaries are what make an arrangement a trust for U.S. purposes,³⁶ and the IRS has ruled privately that foreign pension funds with locked, personal accounts are trusts.^37,38 Governed by Jersey law and run in Jersey, a scheme meets neither test for a domestic trust.^39,40

For a scheme bona fide established otherwise than as a trust, which the person having management of the scheme runs,³² whether it is a trust is not settled, and no IRS guidance addresses Jersey schemes. The strongest point against: such a scheme may be an insurer's policy or the employer's own arrangement, a contract rather than a trust, and the Code treats insurance companies as corporations.⁴¹ But the law still measures a fund value for each member and locks it as for a trust scheme,^33,34 so the cautious course reads every approved scheme as a foreign trust. If your scheme's documents show a policy with an insurer and nothing held for you, these answers may not apply, and the cautious course still follows this block.

A §402(b) employees' trust: contributions the rules require count as your employer's; ones you can stop are yours.

No IRS ruling addresses Jersey schemes, though the IRS has ruled privately that a similar foreign fund, with mandatory employer contributions and personal accounts, is a §402(b) trust.⁴² We read an approved scheme as a §402(b) employees' trust: the employer must contribute,³ and a trust created outside the United States cannot be exempt under U.S. §501(a).⁴³ §402(d) treats a foreign trust as exempt only if it would otherwise qualify,⁴⁴ and on our reading nothing suggests a Jersey scheme meets §401(a).

On that reading, employer contributions are U.S. income to you in the year they are paid, to the extent they are vested,^45,46 and the foreign earned income exclusion cannot cover them.⁴⁷ The scheme's rules decide when employer money vests; Jersey law lets a scheme return the employer's contributions to it only with the Comptroller's prior written approval.⁴⁸ In a defined benefit scheme the employer's contribution for you may not be known; where it is not, the regulations work it out by actuarial methods.⁴⁹

Your own money, for the count below, is what you choose to put in. Jersey law requires the employer, not you, to contribute, and Revenue Jersey says the scheme's rules control contributions.^3,8 AVCs you choose to pay are your own, and so is pay you give up for a contribution (salary sacrifice): an amount contributed at an employee's election is treated as the employee's,⁵⁰ and the IRS's reading of a similar fund treats amounts paid in at the employee's election as the employee's own, taxed as pay.⁵¹ Contributions you can stop, or avoid by leaving the scheme while staying in the job, are your own on the same reading: under the U.S. rules for §401(k) plans, which apply here only by analogy, automatic enrollment with a right to opt out still counts as an election,⁵² and Revenue Jersey's guidance provides for a member who leaves the scheme but stays in the employer's service.⁵³ Contributions the scheme's rules take from your pay as a condition of membership, where you cannot leave while you stay employed, count as your employer's, on the IRS Chief Counsel's reading of Singapore's fund, which is not precedent: a share withheld because it is required is not withheld at your election.⁵⁴ So does a one-time irrevocable choice, made no later than when you first become eligible.⁵⁵ The strongest points against: joining a Jersey scheme is your choice, not the law's, and unlike Singapore's fund, where the employer owes the whole contribution and recovers part from pay, a scheme's rules may put a duty on each side; §414(h)(1) treats a contribution designated as the employee's as not made by the employer, but only for a §401(a) trust or a §403(a) plan,⁵⁶ and the Chief Counsel memorandum, written after it, read the rulings from before the 1974 U.S. pension law (ERISA) the other way as superseded by it and still counted withheld amounts the employee did not elect as the employer's.⁵⁷ This site's guides read Ireland's and the Cayman Islands' required contributions the same way. Where the documents don't show which yours are, this guide counts them as your own for the forms, the cautious course; on the employer's reading they are §402(b) income, which the foreign earned income exclusion cannot cover.⁴⁷ Where you control the company that employs you, as members of a small self-administered scheme may,⁷ you decide what it pays in; no IRS guidance says whether that makes its contributions your own, and that is not settled, so the cautious course counts them as your own for the forms, which brings Part II and Form 3520-A for your whole interest from the start; on the employer's reading they are §402(b) income, which the foreign earned income exclusion cannot cover.^58,50,47

Once your own contributions have come to exceed everything counted as your employer's, all it pays in for you and the contributions the rules require together, counted from the first payment, you are treated as owner of the part your own money funds, if the grantor trust rules are otherwise met.⁵⁸ No contribution to a §402(b) trust is a Part I event, your own included.⁵⁹ Payouts from the employer's part are taxed under §72 when they are paid or made available to you, with what was already taxed to you as basis,^60,61,62 and they stay off Part III if you report them as compensation income,^63,64 unlike payouts from a part you own.⁶⁵

Made available. An amount is made available, on the IRS Chief Counsel's reading of a similar fund, whenever you could receive it just by giving notice that you want it.⁶⁶ Leaving Jersey does not by itself do that: the law gives no lump sum for leaving the island,³⁴ though leaving your employer opens the small-fund payout below if your fund is £10,000 or less,^17,18 and the route out of the island is a move of the whole fund to an equivalent scheme abroad, while you are not resident in Jersey and with the Comptroller's prior written approval.⁶⁷ Where the rules let you take them on request, these are made available on the cautious course once you could elect them: the 30% lump sum from 50,¹⁵ a fund of £10,000 or less once you have left the employer,^17,18 and a trivial commutation from 60.²⁰ Money moved in from a scheme abroad is made available only when the rules release it, as other money is,^68,34,66 and the 30% lump sum does not reach money moved in from a scheme abroad in which you had already taken part of your fund as a lump sum free of tax.⁶⁹ The amount for a year is what is first made available in it, not the whole balance again each year;⁶⁰ for the 30% lump sum the law measures it against the net fund value, which takes off seven-thirds of each amount already taken as a lump sum,⁶⁹ so a working rule, our own, is 30% of the net fund value at the end of the year, plus the 30% lump sums you have already taken, less what was made available in earlier years. Whether money made available and left in the scheme then counts as your own money for Part II is not settled, and no IRS guidance addresses it; the cautious course does not add Part II for it.⁵⁸ Whether choosing a pension the trustees pay, instead of the lump sum, escapes all this is not settled either. A refund of your own contributions is not made available before you take it: you can elect it only by giving up every other benefit,²⁴ and income is not constructively received while your control of it is subject to substantial limitations or restrictions,⁷⁰ so it goes on Part III when paid, unless you report it as compensation income. Nor is a payment left to the trustees' discretion, such as a death lump sum they may pay to any person, made available before it is paid.²⁷ An annuity bought in your name is a payout of its whole value,⁷¹ while a pension the scheme pays is taxed as each payment is made.⁶⁰ A small self-administered scheme may not pay a pension itself: it must buy annuity contracts that cannot be assigned,⁷² so at retirement its members receive, on our reading, a payout of the whole annuity's value.⁷¹

If you are a highly compensated employee and one reason the scheme is not exempt is that it fails the U.S. coverage tests, you include your vested balance, less what has already been taxed to you, in income each year instead;⁷³ those tests leave out nonresident aliens with no U.S.-source earned income from the employer,⁷⁴ and a Jersey scheme need not be open to all employees,⁵ so a scheme for one or a few chosen employees is the case to watch. Whether it applies to you is not settled; ask an adviser.

Rev. Proc. 2020-17 is not settled: Jersey limits relief, not contributions, and some payouts need no retirement.

Rev. Proc. 2020-17 exempts an eligible individual (one who has filed U.S. returns and reported the scheme's income as U.S. law requires)⁷⁵ from Forms 3520 and 3520-A for a retirement trust that meets its conditions,⁷⁶ each a requirement established by the laws of the trust's jurisdiction.⁷⁷ A Jersey scheme meets several. It is tax-favored: its investment income is exempt, and members' and employers' contributions are deductible.^9,10,11,31 Each year the scheme manager files a return with the Comptroller listing the employer's and employees' contributions and the pensions, refunds, transfers and lump sums paid, and a scheme that does not file may lose its approval,^78,79 which on our reading meets the reporting condition.⁸⁰ Only employees may join or pay in, while employed,⁴ which on our reading meets the earned income condition.⁸¹

Three conditions are open. The limit: Rev. Proc. 2020-17 wants contributions limited by a percentage of earned income or a dollar cap,⁸² but Jersey limits relief on a member's own contributions to the lower of £50,000 and relevant earnings, not contributions, as the United Kingdom and Ireland do, and Revenue Jersey says there is no limit to the amount you can pay in.^10,83 Nor did we find anything in Jersey law that caps the employer's contributions, which are deductible as ordinary annual contributions, and since 2015 no tax rule limits the pension a scheme may pay.^11,84 Read as a limit, the relief cap is a percentage of earned income, which would meet the condition; whether it counts is not settled. Payouts: pension income from 50 without retiring is, on our reading, conditioned on a specified retirement age,^12,14,85 but the refund within 5 years of joining, taxed at 10%, and a fund of £10,000 or less paid at any age once you have left the employer, taxed at the standard rate, are not tied to retirement, disability or death, and whether those taxes count as a penalty is not settled.^22,23,17,19 And who is covered: an employer's trust must let a wide range of employees, rank and file included, take part, alone or with comparable plans,⁸⁶ but membership of a Jersey scheme need not be open to all employees.⁵ With no IRS guidance on Jersey schemes, whether Rev. Proc. 2020-17 covers them is not settled.

The proposed regulations, which you may rely on now if you apply them in full and consistently with related persons,⁸⁷ let a value test stand in for a contribution limit: your funds in Jersey together at or under US$600,000 at every point in the year (adjusted for inflation from 2026).⁸⁸ They keep the payout condition in the same words and the employer condition,^89,90 so the proposed regulations are possible where the scheme's rules meet them, which is not settled.

No treaty, and the information agreements change neither U.S. tax nor these forms; Jersey taxes its pensions wherever you live.

No treaty: the United States has no income tax treaty with Jersey,⁹¹ and its treaty with the United Kingdom covers only Great Britain and Northern Ireland.⁹² The tax information exchange agreement and the FATCA agreement (under the U.S. Foreign Account Tax Compliance Act) between the United States and Jersey change neither U.S. tax nor these forms: they provide for the two governments to exchange information.^93,94 The tax information exchange agreement's 2013 Protocol, which adds automatic exchange,⁹⁴ was in force by 28 October 2015: the FATCA agreement could not enter into force before it, and was in force that day.^95,96

Jersey deducts its tax at the standard rate from a pension a scheme pays,²⁹ and Revenue Jersey says a pension paid by a scheme established in Jersey bears Jersey tax wherever the recipient lives.⁹⁷ It lets a pension be paid without that tax only to a resident of a country with which Jersey has an agreement, and the United States is not on its list;^98,99 whether the U.S. foreign tax credit covers it follows the general rules, under which the tax is paid by the person Jersey law makes liable for it, and Jersey charges its 10% tax on a lump sum or a refund on the scheme manager.^100,26,23 Money moved into a Jersey scheme from a U.K. pension scheme leaves the U.S.-U.K. treaty's deferral behind: the IRS has said, in an information letter that is not a ruling, that a scheme established in a third country is not a pension scheme for Article 18(1).¹⁰¹

Part II and 3520-A once your own money passes your employer's share; Part III for payouts, moves and money made available.

Read as a §402(b) trust: no Part I for any contribution.⁵⁹ No Part II or Form 3520-A for the part funded by your employer's money and the contributions the rules require; Part II and Form 3520-A can apply if your own money, AVCs and contributions you can stop included, comes to exceed everything counted as your employer's, or, on the cautious course, from the start if you control the company that pays in, and are then due each year for the part it funds.^102,58,103 No Part III for payouts from the employer-funded part that you report as compensation income.⁶³ Part III can apply if you receive a payout from a part you own, which goes on lines 24 and 27,⁶⁵ or, on the cautious course, if the rules let you take a lump sum or small fund, or money moves out of the scheme, unless you report it as compensation income: an amount made available is received constructively, and line 24 covers what you receive actually or constructively.^104,66 On that course the amount for a year is what is first made available in that year, not the whole balance again each year.⁶⁰ Money counted as made available in an earlier year and paid out later goes on Part III when it is paid, with a statement naming the year it was counted, whether or not it went on Part III that year: the count was a constructive receipt and the payout is the actual one, and line 24 covers what you receive actually or constructively, whether or not it is taxable; what was taxed when it was made available is basis by then, not compensation income you report, so the compensation exception does not take it off.^104,105,63 On the cautious course, a payout that mixes that money with growth or other money taxed only when it is paid goes on Part III in full, the part you report as compensation income included, since the exception covers a distribution you report as compensation income and part of this one is not.^104,63 No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year.^60,106,107 If the scheme does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁰⁸

Money leaving the scheme. A pension, a lump sum, a small fund or trivial commutation, a serious ill-health commutation and a refund are payouts that go on Part III when paid, unless you report them as compensation income, except money counted as made available in an earlier year, which goes on Part III as above.^34,109,63 A move to another Jersey scheme, into a drawdown contract once your pension could start, or abroad is read as the notes on moves at the end of this guide say.^110,111,112 We found no provision in Jersey's divorce law for splitting a pension: the Royal Court may vary settlements, order a transfer or settlement of property and order periodic or lump sums,¹¹³ and a scheme may pay only as the Income Tax Law permits.³⁴ If a share is ever paid to a U.S. former spouse under a court order, it goes on that spouse's Part III when paid, on the cautious course.¹⁰⁹

On a member's death, an income the scheme pays to a U.S. dependant goes on Part III on the cautious course, as paid, and so does a lump sum the trustees pay to a U.S. person they choose.^27,109 A lump sum paid to the estate is part of the estate. If the estate is a U.S. person, its executor reports the payment on Part III, as the gifts section says;¹¹⁴ if it is a foreign estate, a U.S. heir reports, on the cautious course, the whole payment on Part III, however it was funded, as the gifts section says.^115,116 A pension guaranteed for up to 10 years that continues after the member's death can be assigned to a dependant by the member's will or, on an intestacy, by the personal representatives,¹¹⁷ and payments of it to a U.S. person go on Part III on the cautious course.¹⁰⁹

If a scheme is not a §402(b) trust, each contribution you make is a Part I transfer and you are treated as owner of the part it funds, so Part I, Part II, Form 3520-A and Part III all apply;^{118,119,103,109} if it is not a trust at all, none of them apply. Part I also applies at your death as a U.S. citizen or resident, if any part of the scheme is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹²⁰ An eligible individual whose scheme qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of them, which is not settled here.^76,87 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^121,122,123 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.¹²⁴ PFIC rules may apply to what the scheme invests in; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

The Public Employees (Pensions) (Jersey) Law 2014 set up the Public Employees Pension Scheme, whose fund is the fund of the 1967 Scheme, now the fund for both;¹²⁷ a Committee of Management, with employer and member representatives in equal numbers, manages it,¹²⁸ and the fund's assets are held by the Treasurer on behalf of the Committee.¹²⁹ The Government calls the new scheme the Career Average Scheme, for new employees and for members moved from the Final Salary Scheme on 1 January 2019, and describes it as a funded scheme whose contributions are invested.¹³⁰ A permanent employee becomes an active member when the employment begins, while a fixed-term employee chooses before it starts whether to join, a choice binding for the contract that carries over to a renewal unless changed before it.^131,132 An active member and the employer must pay the contributions the funding regulations require;¹³³ from 1 June 2026 the Government gives the rates as 6.77% of basic salary for non-uniformed and 8.82% for uniformed employees, and 13.8% for the employer.¹³⁴ A member may also pay additional voluntary contributions (AVCs), and reduce or cancel them at any time.¹³⁵

Normal pension age is linked to the state pension age, or is 60 for uniformed members,¹³⁶ and an active member who reaches it takes unreduced benefits on leaving Scheme employment;¹³⁷ from 10 years before it (5 for uniformed members) benefits can be paid reduced, again only once an active member has left.¹³⁷ At retirement you can convert 30% of your pension into a tax-free lump sum at £13.50 for each £1,¹³⁸ and the Government also describes a one-off lump sum you can ask for while still employed, in the 10 years before normal pension age or from 55, whichever is later, reduced, from benefits built up in the Career Average Scheme only, which rules out a lump sum at retirement.¹³⁹ A member who leaves with less than 5 years' service may take a deferred pension, a refund of their own contributions and AVCs, or a transfer, and a refund or transfer extinguishes every other right under the Scheme.^140,141 The Income Tax Law treats the Scheme's members as employees for the approval of occupational schemes.¹⁴² We read the Career Average Scheme's Regulations only; the Final Salary Scheme takes the same answers on the cautious course. This guide does not cover the Jersey Teachers' Superannuation Fund or other public schemes outside the 2014 Law; on the cautious course they take this block's answers.

Not settled: a statutory fund held by the Treasurer for a committee. Cautious: a foreign employees' trust.

Not settled, and no IRS guidance addresses the Scheme. For a trust: a funded pool for members, managed by a committee with member representatives,¹²⁸ its assets held by the Treasurer for the Committee and paid out only as pensions, other benefits, refunds and expenses,¹²⁹ and the IRS Chief Counsel read Singapore's statutory fund as a §402(b) employees' trust.¹⁴³ Against: no text calls the fund a trust, and the Committee may invest it as if it were absolutely and beneficially entitled to the investments,¹⁴⁴ while Singapore's fund was held in trust for covered employees.¹⁴³ Trustees who take title to protect or conserve property for beneficiaries make a trust for U.S. purposes,³⁶ and with the question open the cautious course reads the Scheme as a foreign employees' trust, as for approved schemes; run in Jersey under Jersey law, it meets neither test for a domestic trust.^39,40

Cautious: a §402(b) employees' trust; a permanent employee's compulsory share counts as the employer's.

On the cautious reading, an employees' trust the States fund for their employees, described in §402(b), which a trust created outside the United States cannot escape unless it would otherwise qualify.^45,44 A permanent employee's compulsory contributions count as your employer's, on the IRS Chief Counsel's reasoning on Singapore's fund, which is not precedent:⁵⁴ the Regulations require them,¹³³ and we found no way to leave while employed, since active membership ends on leaving, at 75, at the end of a fixed-term contract or on its renewal if the member opts out, or when a notice under paragraph 8 of Schedule 1, which we did not read, expires.¹⁴⁵ The strongest points against: unlike Singapore's fund, where the employer owes the whole contribution and recovers part from pay, the Regulations put a duty on each side;¹³³ and §414(h)(1) treats a contribution designated as the employee's as not made by the employer, but only for a §401(a) trust or a §403(a) plan,⁵⁶ while the Chief Counsel memorandum, written after it, read the rulings from before the 1974 U.S. pension law (ERISA) the other way as superseded by it and still counted withheld amounts the employee did not elect as the employer's.⁵⁷ A fixed-term employee's contributions follow a choice that can be changed before each renewal, which is not a one-time irrevocable choice,^131,55 so on the cautious course they are your own, and so are AVCs, which you can cancel.^135,51 An admitted body's employee is entitled to join under the admission agreement's terms,¹⁴⁶ so on the cautious course those contributions are your own unless the agreement makes membership a condition of employment. You are treated as owner of a part only if your own money ever exceeds everything counted as your employer's, if the grantor trust rules are otherwise met.⁵⁸ On our reading the benefit is vested from the start, since even a leaver with under 5 years keeps a deferred pension,¹⁴⁰ so the employer's contribution for you, worked out by actuarial methods where it is not known, is income each year,^45,49 which the foreign earned income exclusion cannot cover.⁴⁷ Payouts are taxed under §72, with what was already taxed to you as basis.^60,62

Made available. The two lump sums are alternatives: taking one in service rules out the one at retirement.¹³⁹ On the cautious course the in-service lump sum is made available from when you can ask for it, in the amount the Scheme would pay, which is not settled; the Public Employees Pension Team can give the figure, and the Government's page is the only source for this lump sum we read.^139,66 The retirement lump sum is made available only once you have left Scheme employment at an age when benefits can start,¹³⁷ and you count what is first made available once, not both.⁶⁰ A refund, which extinguishes every other right, is not made available before you take it.^141,70 Whether money made available and left in the Scheme then counts as your own money for Part II is not settled; the cautious course does not add Part II for it.⁵⁸

Rev. Proc. 2020-17 is not settled: contributions are set percentages of pay, but AVCs have no limit.

As for approved schemes, the Scheme is tax-favored and its members are employees paying from pay, which on our reading meets those conditions.^142,9,31,81 The reporting condition is met, on our reading, if the Scheme files the annual return approved schemes file, which we did not confirm.^79,80 Every permanent employee joins from the first day, which on our reading meets the employer condition.^132,86 The limit: contributions are set percentages of pay,^133,134 but AVCs have no stated limit,^135,82 so it is not settled. Payouts: the in-service lump sum and the refund within 5 years come before retirement, and whether the reduction, or giving up every other right, counts as a penalty is not settled.^139,141,85 Whether Rev. Proc. 2020-17 covers the Scheme is not settled. The proposed regulations, which you may rely on as the Form 3520 instructions describe, let a value test stand in for the limit,^87,88 and how it measures a defined benefit is not settled either.

No treaty.

The United States has no income tax treaty with Jersey.⁹¹ A pension the Scheme pays is earned income from which Jersey tax is deducted, as for approved schemes.²⁹

As for approved schemes: Part III for payouts, the lump sum you can first take, and moves; Part II once your own money is larger.

No Part I for any contribution: on the cautious course the Scheme is read as a §402(b) trust.⁵⁹ No Part II or Form 3520-A for the part funded by your employer's money and a permanent employee's compulsory contributions; Part II and Form 3520-A can apply if your own money (AVCs, contributions you chose to make on a fixed-term contract, and, on the cautious course, an admitted body's employee's contributions) comes to exceed everything counted as your employer's, and are then due each year for the part it funds.^102,58,103 Part III can apply if you receive a pension or other payout you do not report as compensation income, if money moves out of the Scheme, or, on the cautious course, once you can take a lump sum, the in-service one or the one at retirement, whichever is first made available.^{109,104,66,63} Money counted as made available in an earlier year and paid out later goes on Part III when it is paid, with a statement naming the year it was counted, whether or not it went on Part III that year: the count was a constructive receipt and the payout is the actual one, and line 24 covers what you receive actually or constructively, whether or not it is taxable; what was taxed when it was made available is basis by then, not compensation income you report, so the compensation exception does not take it off.^104,105,63 On the cautious course, a payout that mixes that money with growth or other money taxed only when it is paid goes on Part III in full, the part you report as compensation income included, since the exception covers a distribution you report as compensation income and part of this one is not.^104,63 A refund goes on Part III when paid.¹⁰⁹ No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules.^60,106 If the Scheme does not file Form 3520-A for a part you own, you attach a substitute to your Form 3520.¹⁰⁸

A survivor's pension or other death benefit paid to you as the U.S. beneficiary of a member is, on the cautious course, a payout from a foreign trust that goes on Part III.¹⁰⁹ The Regulations provide for a lump sum on a death in Scheme employment;¹⁴⁷ if the Scheme pays a death lump sum to a member's estate, the executor of an estate that is a U.S. person reports it on Part III; if the estate is foreign and passes it on to you, the cautious course reports the whole payment on Part III, however it was funded, as the gifts section says.^114,115,116 A refund due to a member who dies before it is paid goes to the member's estate, and is read as the gifts section says.¹⁴⁸ An eligible individual whose Scheme qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of these, which is not settled here.^76,87 If the Scheme is not a trust, none of these forms apply.¹¹⁸ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

An Article 131A scheme is a superannuation fund established under irrevocable trusts in connection with a trade or undertaking carried on wholly or partly outside Jersey by a person not resident in Jersey,¹⁴⁹ for benefits for employment in it wholly outside Jersey;¹⁵⁰ Revenue Jersey requires it not to pay pension benefits before 50, to start them before 75, and to prohibit loans to members.¹⁵¹ An international savings plan is a scheme under irrevocable trusts under Jersey law, with two or more trustees or a corporate trustee regulated by the Jersey Financial Services Commission, set up in connection with an undertaking a non-resident carries on, for benefits for employment wholly outside Jersey;¹⁵² Revenue Jersey describes these as flexible savings plans for employees of multinational and international companies.¹⁵³ A savings plan pays benefits, loans included, under its own rules, with no age restrictions, and may lend a member up to 30% of the benefits accrued for that member;^154,155 contributions to it get no Jersey tax relief.¹⁵⁶ Neither Article requires the employer to pay in, and Revenue Jersey's guidance on savings plans provides for members' own contributions.^152,149,157 The income of both is exempt from Jersey tax, and so are benefits paid to someone not resident in Jersey.^158,159,160 A scheme with members in Jersey and abroad may be approved in part under each Article.¹⁶¹ Both Articles require irrevocable trusts,^152,149 so a savings plan written as a contract with an insurer is not one of these; it is in the block on policies below, and one whose documents leave it unclear is read as a trust, as here.

A foreign trust: irrevocable trusts set up for an employer outside Jersey and run outside the United States.

A foreign trust: an international savings plan is established under irrevocable trusts under Jersey law with regulated trustees,¹⁵² and an Article 131A scheme is a superannuation fund under irrevocable trusts.¹⁴⁹ Trustees holding a plan's assets for its members is what makes an arrangement a trust for U.S. purposes,³⁶ and run outside the United States it meets neither test for a domestic trust.^39,40

A §402(b) trust where the employer pays in; money no employer paid in for you is reported as yours on the cautious course.

On our reading a §402(b) employees' trust where the employer pays in: the employer sets the plan up for its employees and pays into a trust that cannot be exempt under §501(a),^43,44 and §402(b) reaches contributions an employer makes to an employees' trust, not only to a pension trust.⁴⁵ Employer money is income when vested, which the plan's rules decide,^46,154 and the count of your own money is as for approved schemes: what you choose to pay is your own, what the rules require while you cannot leave counts as your employer's, and unclear money is your own on the cautious course.^58,54,51 Where you control the company that pays in, the cautious course counts its contributions as your own, as for approved schemes, which brings Part II and Form 3520-A for your whole interest from the start; on the employer's reading they are §402(b) income, which the foreign earned income exclusion cannot cover.^58,50,47

For money no employer paid in for you, whether the §402(b) exception reaches it is not settled: the exception tests the trust, not the member,⁵⁹ and a private ruling that found a fund individuals could join to be a §402(b) trust ruled only for members whose employer paid in more than they did.^162,163 So the cautious course reports such money as a foreign trust you own, with Part I for each contribution and Part II and Form 3520-A each year, as this site's guides read Hong Kong's accounts with no employer money.^164,118,103

Made available. A savings plan with no age restrictions may let you take benefits on request,¹⁵⁴ and on the cautious course anything the rules let you take on request is made available once you could take it, counting only what is first made available in a year.^66,60 A loan from the plan goes on Part III on the cautious course,^155,165 and how it is taxed is not settled. Payouts are taxed under §72, with what was already taxed to you as basis.^60,62

Rev. Proc. 2020-17 unlikely: no limit on what is paid in. Proposed rules: possible for a 131A scheme, not a savings plan.

Rev. Proc. 2020-17 is unlikely. An international savings plan's income is exempt, but nothing we read limits what may be paid in and its contributions get no Jersey relief, so the limit condition is not met, and it may pay benefits at any age, so the payout condition is not met either;^{160,156,82,154,85} its annual return is promised for a later version of the guidance.¹⁶⁶ An Article 131A scheme's income is exempt and it must wait for 50,^158,151 but nothing we read limits what may be paid in, and the Income Tax Law gives contributions to it no relief that could serve as a cap,^167,82 so the limit condition is not met. It meets the reporting condition on our reading, as approved schemes do: Revenue Jersey's annual return must be completed by a scheme manager, which for a scheme under trusts means its trustees; the return lists each member paid a pension in the year and the employer's and employees' contributions; and an approval lapses after two years without returns.^{79,32,168,151,80}

The proposed regulations keep the payout condition, which a savings plan fails, so they are unlikely for one.^169,89 For an Article 131A scheme they are possible, which is not settled. You may rely on them as the Form 3520 instructions describe, and their value test can stand in for the limit: your funds in Jersey together at or under US$600,000 at every point in the year (adjusted for inflation from 2026).^87,88 On our reading the scheme's exempt income, its annual return and its sole purpose of benefits for employment meet their tax-favored, reporting and earned income conditions.^{170,171,150,172} Payouts: Revenue Jersey requires the scheme to pay no pension benefits before 50, except in ill health or in an occupation where people customarily stop work earlier, of which it knows none, and to prohibit loans to members, and discretionary payouts before 50;^151,173 Part 19's refund and small-fund payouts are written for approved Jersey schemes, which an Article 131A scheme is not.^174,22,17 So the payout condition holds on our reading, unless the scheme's own rules pay a lump sum or refund before 50.⁸⁹ They also keep the employer condition: a wide range of employees must be able to take part, alone or with the employer's comparable plans, which turns on the scheme's rules,⁹⁰ and how the value test measures a defined benefit is not settled.

No treaty; Jersey does not tax these plans' benefits paid to a non-resident.

No treaty: the United States has no income tax treaty with Jersey.⁹¹ Jersey does not tax these plans' benefits paid to someone not resident in Jersey.^159,158

Part II once your own money passes the employer's, or yearly with no employer money for you; Part III for payouts, loans, moves.

Where an employer pays in, read as a §402(b) trust: no Part I for the employer's money or your own contributions alongside it.⁵⁹ No Part II or Form 3520-A for the part counted as your employer's; Part II and Form 3520-A can apply if your own contributions come to exceed everything counted as your employer's, or, on the cautious course, from the start if you control the company that pays in, or for money no employer paid in for you, and are then due each year for the part they fund.^102,58,103 Part III can apply if you receive a payout or loan from the plan that you do not report as compensation income, or, on the cautious course, once the plan's rules let you take money on request, or money moves out.^{109,165,104,66,63} Money counted as made available in an earlier year and paid out later goes on Part III when it is paid, with a statement naming the year it was counted, whether or not it went on Part III that year: the count was a constructive receipt and the payout is the actual one, and line 24 covers what you receive actually or constructively, whether or not it is taxable; what was taxed when it was made available is basis by then, not compensation income you report, so the compensation exception does not take it off.^104,105,63 On the cautious course, a payout that mixes that money with growth or other money taxed only when it is paid goes on Part III in full, the part you report as compensation income included, since the exception covers a distribution you report as compensation income and part of this one is not.^104,63 No Form 4970: payouts from a §402(b) trust are taxed under §72, not under the trust distribution rules, and the income of a part you own is taxed to you each year.^60,106,107 If the trustees do not file Form 3520-A for a part you own, you attach a substitute to your Form 3520.¹⁰⁸

For money no employer paid in for you, and for all of it if a plan is not a §402(b) trust, on the cautious course: Part I can apply if you pay in as a U.S. person, or within 5 years before your U.S. residency started,^118,175 Part II and Form 3520-A are due each year for that part, and payouts from it go on Part III, lines 24 and 27.^103,65 On the same cautious course, Part I also applies at your death as a U.S. citizen or resident, if any part of the plan is then treated as owned by you or is in your gross estate, unless the exception for a §402(b) trust reaches the plan, as it may: your executor reports it, whether or not the executor is a U.S. person.^120,59 If a plan is not a trust at all, none of these apply.¹¹⁸ An eligible individual whose Article 131A scheme qualifies under the proposed regulations files none of these, which is not settled here.⁸⁷ On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^123,176 No IRS guidance names executors. PFIC rules may apply to what the plan invests in; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

A person over pensionable age who meets the contribution conditions is entitled to an old age pension,¹⁷⁷ paid out of the Social Security Fund, which the Minister controls and manages, and into which contributions, and money the States provide, are paid.¹⁷⁸

Not a trust: a statutory benefit from a fund under the Minister's control, with no account for you.

Not a trust: the pension is a statutory entitlement paid from a pooled fund under the Minister's control, with no account held for you,^177,178 and a trust for U.S. purposes needs trustees holding property for the beneficiaries.³⁶ Other benefits paid from the Social Security Fund are read the same way.¹⁷⁸

Does not apply: there is no employees' trust.

§402(b) reaches an employer's contributions to an employees' trust,⁴⁵ and there is none here.¹⁷⁸

Not needed.

§6048 reaches only foreign trusts.¹¹⁸

No treaty: the pension is taxed in the United States as an annuity; Jersey does not tax it for a non-resident.

No treaty: the United States has no income tax treaty with Jersey,⁹¹ and foreign social security is taxable in the United States as an annuity unless a treaty exempts it or treats it as U.S. Social Security.¹⁷⁹ Jersey does not tax the old age pension when it is paid to someone not resident in Jersey;¹⁸⁰ how it taxes other benefits paid abroad was not checked.

Nothing on Form 3520 or 3520-A, and Form 8938 does not count it.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts, and neither the old age pension nor any other Social Security benefit is one.^118,103,109 Form 8938 does not count a foreign government's social security.¹⁸¹ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

A Jersey retirement trust scheme is established under irrevocable trusts under Jersey law and administered in Jersey, only to provide its benefits, with two or more trustees or a corporate trustee regulated by the Jersey Financial Services Commission,¹⁸² for its primary beneficiary, the individual for whose benefit the trust is primarily established.¹⁸³ Only you, and someone from whom you receive relevant earnings, may pay in;¹⁸⁴ Revenue Jersey calls these trust arrangements that act as administered private pension schemes, and says that if an employer pays in, you cannot claim tax relief on its contributions.¹⁸⁵ The scheme pays you an annuity equivalent (a regular payment), worked out as the Comptroller publishes, starting between 50 and 75, and may otherwise pay only as the law permits, which includes the 30% lump sums, small-fund, trivial and ill-health commutations and transfers approved schemes may offer;^186,12 on your death it may pay your dependants an annuity equivalent, or a lump sum to your estate or to any person.¹⁸⁷ A retirement annuity contract for someone not resident in Jersey whose work is outside Jersey may instead be made under an irrevocable trust established under Jersey law and administered in Jersey, for the sole purpose of that person's retirement benefits, and may let the whole fund be taken as a lump sum;¹⁸⁸ one made with an insurer is in the block on policies below.

A foreign trust: set up under irrevocable trusts under Jersey law for you as primary beneficiary.

A foreign trust: it is established under irrevocable trusts under Jersey law,¹⁸² trustees holding its assets for its primary beneficiary is what makes an arrangement a trust for U.S. purposes,³⁶ and governed by Jersey law and administered in Jersey, it meets neither test for a domestic trust.^39,40 A retirement trust for an overseas resident is a trust in the same way.¹⁸⁸

Does not apply to your own money; an employer's money is reported as yours, which is not settled.

§402(b) reaches only an employer's contributions to an employees' trust,⁴⁵ so it taxes nothing on money you pay in yourself. On our reading it does not apply even where an employer pays in: the trust is established for you as its primary beneficiary, not as your employer's plan for its employees.^183,184 The strongest point against: an employer that pays into a trust for its employee looks like one funding an employees' trust,⁴⁵ and Revenue Jersey gives you no relief on the employer's payment.¹⁸⁵ So the U.S. character of an employer's payment is not settled; this guide reports it as yours for the forms, as this site's guides read an employer's payments into Ireland's custodian PRSAs, and on a §402(b) reading the foreign earned income exclusion would not cover it.⁴⁷

Rev. Proc. 2020-17 is not settled: Jersey limits relief, not contributions. Proposed regulations: possible, not settled.

Rev. Proc. 2020-17 exempts an eligible individual for a retirement trust that meets its conditions.^75,76 A retirement trust scheme's investment income is exempt and your contributions are deductible within the relief limit,^9,10,31 its annual accounts go to the Comptroller,^189,80 and benefits wait for 50, earlier only in ill health or in an occupation where people customarily stop work before then.^12,13,85 The limit is open, as for approved schemes: Jersey limits relief, not contributions.^10,83,82 So is the earnings condition: the law lets you pay in with no earnings test, though relief needs relevant earnings,^184,190,81 and so is a small fund paid at any age.¹⁷ With no IRS guidance on Jersey plans, whether a scheme qualifies is not settled. Under the proposed regulations, which you may rely on as the Form 3520 instructions describe, a value test at or under US$600,000 (adjusted for inflation from 2026) can stand in for a contribution limit,^87,88 and their earnings condition makes an allowance for limited contributions by the unemployed,¹⁷² so they are possible, which is not settled.

A retirement trust for an overseas resident is unlikely to qualify under Rev. Proc. 2020-17: nothing we read limits what may be paid in, and the Income Tax Law gives contributions to it no relief that could serve as a cap.^167,191,82 The proposed regulations' value test can stand in for the limit, and Revenue Jersey reads such a contract as one that prevents benefits before 50,^88,191,89 but it describes the returns it requires as company tax returns, so whether they are reporting on the trust is not settled;^191,171 the proposed regulations are possible, as for a retirement trust scheme, which is not settled.

No treaty.

The United States has no income tax treaty with Jersey.⁹¹ An annuity equivalent the scheme pays is earned income from which the scheme manager deducts Jersey tax at the standard rate.²⁹ A retirement trust for an overseas resident pays you free of Jersey tax while you are not resident in Jersey.¹⁵⁸

Full reporting, as for a foreign trust you own: Part I for money in, Part II and 3520-A each year, Part III for payouts.

You are treated as owner of your part, including money paid in before you became a U.S. person, because its income is held for you,^164,119 so Part II and Form 3520-A are due each year,¹⁰³ and payouts and moves go on Part III, lines 24 and 27, as payouts to an owner.^109,65 Part I can apply if money goes in: each contribution you make as a U.S. person is a Part I transfer, an employer's included as made for you on the cautious course, and so is money moved in, and one made within 5 years before your U.S. residency started is treated as made on your residency starting date and goes on Part I for that year.^118,175 Part I also applies at your death as a U.S. citizen or resident, if any part of the scheme is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹²⁰ If the trustees do not file Form 3520-A, you attach a substitute to your Form 3520.¹⁰⁸ No Form 4970, because the income is taxed to you each year.¹⁰⁷ An eligible individual whose scheme qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of these, which is not settled here.^76,87 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^121,122,123 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.¹²⁴

On your death, an annuity equivalent or lump sum the scheme pays to a U.S. dependant or other U.S. person goes on that person's Part III on the cautious course,^187,109 and a lump sum paid to your estate is read as the gifts section says. If you were not a U.S. person, what a U.S. heir receives from your estate is, on the cautious course, a payout from a foreign trust on Part III, since your own money funds all of it;^115,109 whether it can carry out income kept in earlier years, with Form 4970, is not settled.¹⁹² Money moved in from an approved scheme goes on that scheme's Part III on the cautious course, as the notes on moves at the end of this guide say.¹¹² PFIC rules may apply to what the scheme invests in; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

A drawdown contract is made between you and a manager,¹⁹³ who must be resident in Jersey, unconnected with you, and a fund, bank, insurer or financial services business holding a Jersey permit or registration.¹⁹⁴ It may take in only your fund value in an approved Jersey scheme and money from an approved trust,¹⁹⁵ and only once your pension could have started.¹¹¹ The manager certifies that you have minimum retirement income or capital,¹⁹⁶ invests the funds in deposits, listed securities, collective investment funds or long-term insurance,¹⁹⁷ may pay no one but you or your personal representative, apart from an annuity, fees and tax,¹⁹⁸ pays you such income or other sums from the funds as you may require,¹⁹⁹ pays your personal representative what is left within 3 months of your death,²⁰⁰ and sends the Comptroller a statement of the funds, money in and money out each year.²⁰¹ What you draw is earned income from which the manager deducts Jersey tax at the standard rate.²⁰² An approved trust is set up with a drawdown contract before pensionable age; its trustee, resident in Jersey and registered there, buys U.K. government securities and holds them upon trust for you until a day selected for it, paying you only their income.^{203,204,205,206}

Drawdown: not settled, a regulated manager invests it for you; cautious, a foreign trust. An approved trust is a trust.

Drawdown contract: not settled, and no IRS guidance addresses Jersey drawdown contracts. Federal law, not Jersey's label, decides.²⁰⁷ The argument that it is not a trust: it is a contract between you and the manager, and the money is yours to draw as you require, with no lock,^193,199 and a holder who only holds and transfers title at the owner's direction is no trustee.²⁰⁸ The argument that it may be one: the manager holds and invests the funds for you under rules the law sets, may pay no one else, and reports them to the Comptroller each year,^197,198,201 which puts title with the manager and the benefit with you³⁶ and goes beyond only holding title.²⁰⁹ That is the case of Ireland's Approved Retirement Funds, which this site also reports on the cautious course. With the question open and the penalty for a missing Form 3520-A large,²¹⁰ this guide takes the cautious course of reading a drawdown contract as a trust, and a foreign one: run in Jersey by a manager resident there, it meets neither test for a domestic trust.^39,40

Approved trust: a foreign trust. Its trustee holds the securities upon trust for you,²⁰⁴ which is the form of a trust for U.S. purposes,³⁶ and a trustee resident in Jersey runs it.^206,39

Does not apply: money arrives only by transfer from a scheme, which is that scheme's payout or move.

§402(b) reaches only an employer's contributions to an employees' trust,⁴⁵ and a drawdown contract or approved trust takes in money only by transfer, from an approved scheme or an approved trust.¹⁹⁵ The move in is the sending scheme's payout or move, as the notes on moves at the end of this guide say.¹¹² Whether the scheme balance is made available once you could move it into drawdown and draw on it at will is not settled; the cautious course reports the move when it happens, with Part III from the scheme and Part I at the drawdown end.^111,199,66

Not settled: tax-favored and reported yearly, but money comes only by transfer, protected only from a qualifying plan.

Not settled. A drawdown contract's or approved trust's investment income is exempt,^9,31 the manager or trustee reports to the Comptroller each year,^201,211,80 and drawdown opens only once your pension could have started.^111,85 But money comes in only by transfer from an approved scheme, which Rev. Proc. 2020-17 protects only if the sending plan itself qualifies,²¹² and whether a Jersey scheme qualifies is not settled, as its block says. No IRS guidance addresses drawdown contracts; the proposed regulations use the same words on payouts.^89,87

No treaty; the manager deducts Jersey tax from what you draw.

No treaty: the United States has no income tax treaty with Jersey.⁹¹ What you draw is earned income from which the manager deducts Jersey tax at the standard rate.²⁰²

On the cautious course, full reporting, as for a foreign trust you own, with Part I for money moved in.

On the cautious course, you report a drawdown contract as a foreign trust you own, and an approved trust is one: you are treated as owner because its income is held for you,^164,119 so Part II and Form 3520-A are due each year,¹⁰³ and withdrawals and other payments to you go on Part III, lines 24 and 27, as payouts to an owner.^109,65 Part I can apply if money moves in: money moved in while you are a U.S. person is a Part I transfer, and money moved in within 5 years before your U.S. residency started is treated as moved on your residency starting date and goes on Part I for that year.^118,175 Part I also applies at your death as a U.S. citizen or resident, if any part of the contract or trust is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹²⁰ If the manager or trustee does not file Form 3520-A, you attach a substitute to your Form 3520.¹⁰⁸ No Form 4970, because the income is taxed to you each year.¹⁰⁷ An eligible individual whose contract or trust qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of these, which is not settled.^76,87 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^121,122,123 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.¹²⁴

On your death the manager or trustee pays what is left to your personal representative,^200,213 and what a U.S. heir receives from your estate is read as the gifts section says. If you were not a U.S. person, the cautious course reports it on Part III, as a payout from a foreign trust, since your own money funds all of it;^115,109 whether it can carry out income kept in earlier years, with Form 4970, is not settled.¹⁹² If a drawdown contract is not a trust, none of these apply to it, and you own its assets directly.²⁰⁸ PFIC rules may apply to what the contract or trust invests in; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

Revenue Jersey says an individual can set up their own annuity company and make a retirement annuity contract with it, and the company must be established for the sole purpose of holding the contract.²¹⁴ Revenue Jersey calls this a self invested pension plan (SIPP), in Jersey legislation a self-administered retirement annuity contract.²¹⁵ Such a company carries on annuity business solely for the individual and their dependants, which spares it an insurance permit,²¹⁶ and on our reading it is a company resident in Jersey, one of the kinds of company the Income Tax Law admits.²¹⁷ The contract must forbid borrowing for the fund, loans to you or anyone connected with you, the use of its assets for your benefit, and any refund of contributions to you,²¹⁸ and the company cannot pay an annuity itself: at retirement the fund, less any permitted lump sum, buys an annuity from an authorised insurance company.²¹⁹ You, and an employer, may pay in,^220,215 and the company's accounts, incorporating the annuity fund and showing employer and member contributions apart, go to the Comptroller each year.²²¹ On your death the contract may pay the whole fund as a lump sum to your estate or to any person.²²²

Not settled: a company set up only to hold your pension fund under a locked contract. Cautious: a foreign trust you own.

Not settled, and no IRS guidance addresses Jersey SIPPs. For a trust: the company exists only to hold one person's retirement fund under a contract the law locks,^214,218 the law calls what it holds the fund accumulated under the contract,³³ and the IRS has ruled privately that a foreign pension entity, whose members could not assign their interests, is a trust;³⁷ federal law, not the local label, decides.²⁰⁷ Against: it is a company, a body corporate from incorporation,²²³ and it owes you a contract, as an insurer does.⁴¹ With the question open, the cautious course reads the arrangement as a foreign trust you own, with the answers of the retirement trust scheme block above;³⁶ run in Jersey, it meets neither test for a domestic trust.³⁹ If you own the company's shares, it may instead be a foreign corporation you own, and Form 5471 and the PFIC rules may apply; this guide covers neither.²²⁴

Does not apply to your own money; an employer's money is reported as yours, which is not settled.

§402(b) reaches only an employer's contributions to an employees' trust,⁴⁵ so it taxes nothing on money you pay in yourself. An employer may also pay in;²²⁰ on our reading that does not make the contract your employer's plan for its employees, since it is your contract, for you and your dependants,²¹⁶ but that is not settled, so this guide reports an employer's payments as yours for the forms, as for retirement trust schemes; on a §402(b) reading the foreign earned income exclusion would not cover them.⁴⁷ On the company reading, an employer's premiums for an annuity contract are your income as section 83 provides.²²⁵

Rev. Proc. 2020-17: not settled, as for retirement trust schemes. Proposed regulations: possible, not settled.

As for retirement trust schemes, whether Rev. Proc. 2020-17 covers a SIPP is not settled: its fund income is exempt and your contributions get relief within the limit,^9,10,31 its accounts go to the Comptroller each year,^221,80 and benefits wait for 50,^12,85 but Jersey limits relief, not contributions.^83,82 The proposed regulations' value test can stand in for the limit,^87,88 so they are possible, which is not settled.

No treaty.

The United States has no income tax treaty with Jersey.⁹¹

On the cautious course, full reporting, as for a foreign trust you own, with Part I for money that goes in.

On the cautious course, you report the arrangement as a foreign trust you own: you are treated as owner because its income is held for you,^164,119 so Part II and Form 3520-A are due each year,¹⁰³ and payouts and moves go on Part III, lines 24 and 27, as payouts to an owner.^109,65 Part I can apply if money goes in: on the cautious course each contribution you make as a U.S. person, an employer's included as made for you, and money moved in is a Part I transfer, and one made within 5 years before your U.S. residency started goes on Part I for that year.^118,175 Part I also applies at your death as a U.S. citizen or resident, if any part of the contract is then treated as owned by you or is in your gross estate: your executor reports it, whether or not the executor is a U.S. person.¹²⁰ If no Form 3520-A is filed, you attach a substitute to your Form 3520.¹⁰⁸ No Form 4970 for what you own, because its income is taxed to you each year.¹⁰⁷ An eligible individual whose contract qualifies under Rev. Proc. 2020-17 or the proposed regulations files none of these, which is not settled.^76,87 On our reading the exemption also spares your executor the report of your death, if you were an eligible individual and the plan qualified: it covers an eligible individual's transactions with, or ownership of, the trust, and an eligible individual can be someone who at any time was a U.S. citizen or resident.^121,122,123 No IRS guidance names executors, and the revenue procedure's scope speaks of the eligible individual who would otherwise report.¹²⁴

The annuity bought at retirement is, on this reading, a payout to you of what the fund spends on it, on Part III.^219,65 A lump sum paid at your death to a U.S. person goes on that person's Part III on the cautious course, and one paid to your estate is read as the gifts section says;^222,109 if you were not a U.S. person, whether Form 4970 can apply to what a U.S. heir receives is not settled.¹⁹² If the arrangement is not a trust, none of these apply; if you own the company's shares, Form 5471 can apply instead, and PFIC rules may apply, which this guide does not cover.²²⁴ FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

A Jersey retirement annuity contract is made by someone ordinarily resident in Jersey with a company carrying on in Jersey or Guernsey the business of granting annuities on human life: a company resident in Jersey, an authorized insurance company, or a business authorized in the United Kingdom with a branch or agency in Jersey or Guernsey;^226,217 this block covers one with an insurer, and one with a Jersey company set up for you has the block above. Only you, and someone from whom you receive relevant earnings, may pay in,²²⁰ and any annuity under it must be paid by an authorized insurance company.²²⁷ Revenue Jersey describes one with an insurer as a personal pension plan underwritten by an insurance company.²²⁸ The block also covers a life annuity you buy, savings and investment policies you buy from an insurer, a retirement annuity contract for an overseas resident made with an insurer,¹⁸⁸ and bank deposits and securities held in your own name, or by a bank, broker or trust company only to act on your instructions.²⁰⁸

Not a trust: a contract with an insurer, which holds the assets, or property that is yours. Unclear documents: read as a trust.

Not a trust, on our reading, resting on legal form, and no IRS guidance addresses Jersey contracts. A trust needs trustees who take title to protect or conserve property for beneficiaries,³⁶ and an insurer owns its assets and owes you a contract; the Code treats insurance companies as corporations.⁴¹ The strongest authority the other way is the IRS's private ruling that a foreign pension entity was a trust,³⁷ but that entity held assets for covered employees who could not assign their interests, not policies an insurer sells to the public. Under an investment-linked policy you may be treated as owning the assets behind it for U.S. tax, which makes no trust.²²⁹ A deposit or a security in your own name has no trustee at all,³⁶ and where a bank, broker or trust company holds title to your securities only to transfer it at your direction, that is not a trust either.²⁰⁸ Check the documents: if they don't make clear that the contract is with an insurer and nothing is held on trust for you, the cautious course is the retirement trust scheme block above. Whether a policy meets the U.S. definition of life insurance, or is an annuity, is a separate question this guide does not decide.

Does not apply to what you pay; an employer's premiums for an annuity contract are your income.

§402(b) reaches only an employer's contributions to an employees' trust,⁴⁵ and a contract with an insurer is not one. An employer may pay into a retirement annuity contract,²²⁰ and premiums an employer pays for an annuity contract outside the U.S. qualified rules are your income as section 83 provides.²²⁵ An annuity an approved scheme buys in your name is a payout of its whole value from the scheme, as that block says.⁷¹

Not needed.

Since §6048 reaches only foreign trusts.¹¹⁸

No effect on these forms.

The United States has no income tax treaty with Jersey.⁹¹

Nothing for the contract itself; an annuity a scheme buys you is that scheme's payout, on the scheme's forms.

No Part I, Part II, Form 3520-A, Part III, or Form 4970: Forms 3520 and 3520-A report foreign trusts.^118,103,109 How a foreign policy or annuity is taxed in the United States is not decided here. Funds held under a policy, or in your own name, may be subject to the PFIC rules; this guide does not decide that. FBAR (FinCEN Form 114) and Form 8938 are separate, and an exemption from Forms 3520 and 3520-A does not remove them.^125,126

A trust exists where a trustee holds property, not as its own, for the benefit of any person, for a purpose that is not only for the trustee's benefit, or both,²³⁰ and a Jersey trust is one whose proper law is the law of Jersey.²³¹ A settlor may keep, or give others, wide powers without affecting the trust's validity, among them powers to revoke, vary or amend it, to direct the trustee on investments, to appoint or remove any trustee, enforcer or beneficiary, to change its proper law, and to require a named person's consent before the trustee acts.^232,233 Unless its terms provide otherwise, a trust may last for an unlimited period, and no rule against perpetuities or excessive accumulations applies,²³⁴ so income kept for years can come out as an accumulation distribution, with the throwback (the tax, with interest, on Form 4970) described below.¹⁹² A trustee must keep accurate accounts and records.²³⁵

A private trust company, a company that provides trust services only for a specific trust or trusts and not to the public, administered by a registered trust company, is exempt from registering as a trust company.²³⁶ Jersey-resident trustees are, in strictness, taxable on all their income as trustees, but by concession, where all the life tenants (beneficiaries entitled to the trust's income as it arises), or all the beneficiaries of a trust without life tenants, are not resident in Jersey, they are not taxed on income from outside Jersey;²³⁷ income that stays taxable in Jersey, such as Jersey rents, must still be reported.²³⁸ This guide does not cover employee benefit or share plan trusts, whoever the employer, or charitable trusts.

A foreign trust unless a U.S. court can supervise it and U.S. persons control all its substantial decisions.

An ordinary trust where the trustee holds property for the beneficiaries,³⁶ and a foreign trust where a trustee in Jersey administers it under Jersey law, since it then fails the court test, which alone makes it foreign, even where the trustee is a U.S. citizen.^39,40 A trust is domestic only on a day a U.S. court can supervise its administration and U.S. persons control all of its substantial decisions, counting everyone who can make one, not only the trustees.²³⁹ Powers a settlor keeps, or a protector's consent rights, do not on our reading stop it being a trust; they go to who is owner, below, and where a foreign person holds one that is a substantial decision, such as a power to revoke the trust or to replace the trustee, it also keeps the trust foreign, even with a U.S. trustee.^240,241 A bare trust whose trustee only holds title for an adult entitled to the property may not be a trust for U.S. purposes,²⁰⁸ but that ruling is narrow,²⁰⁹ so whether a bare trust is one is not settled, and the cautious course reports it as a trust. A bank or trust company that holds your own investments only to act on your instructions is not that kind of bare trust; it is an account, not a trust.²⁰⁸ The Fifth Circuit has cited a Tax Court case as holding trusts organized under Jersey law and supervised by the Royal Court of Jersey to be foreign trusts.²⁴² The block on deposits, securities and policies above covers an account held only on your instructions. A trust with a U.S. trustee, protector or adviser has its own block below.²³⁹ On our reading, reserved powers, a private trust company as trustee, or Jersey's tax concession change none of this, since none of them moves the trust's administration or decisions to the United States.^232,39 A trust that mainly runs a business, rather than holding property for its beneficiaries, may be a business entity rather than a trust.²⁴³

A U.S. person who funds it is owner when it has a U.S. beneficiary; a foreign settlor only in two narrow cases.

Who is treated as owner decides who files Part II and Form 3520-A. A U.S. person who transfers property to the trust is treated as owner of the part it funds for any year in which the trust has a U.S. beneficiary.¹¹⁹ Someone who funds the trust while not a U.S. resident and becomes one within 5 years is treated, for this rule and for Part I, as transferring that part of the trust on the day their U.S. residency starts.¹⁷⁵ A settlor who is not a U.S. person is treated as owner only if they can revoke the trust alone or with the consent of a related or subordinate party subservient to them, or if only they or their spouse can receive distributions during their life.²⁴⁴ Otherwise, unless another grantor trust rule makes a U.S. person owner,¹⁶⁴ no one is owner, and the trust is taxed as a separate, non-grantor trust.²⁴⁵

A trust has a U.S. beneficiary for the transferor rule if anyone has discretion to pay or benefit any person, unless its terms identify the class who may benefit and none of them is a U.S. person that year,²⁴⁶ even if nothing is paid to a U.S. person that year;²⁴⁷ a power to amend the trust to benefit a U.S. person counts, and so does a letter of wishes or other understanding that points to benefiting one, even one that says it is only a suggestion.²⁴⁸ Where a U.S. person funds the trust, the IRS may treat it as having a U.S. beneficiary unless that person shows it has none.²⁴⁹ A beneficiary who first became a U.S. person more than 5 years after the transfer is not counted,²⁵⁰ and a transferor whose trust gains a U.S. beneficiary is taxed that year on the income the trust kept for that part to the end of the year before, as an accumulation distribution with the interest charge.^251,252 A settlor who is not a U.S. person keeps the revocable-trust exception for a year only if they can take the property back alone, or with the consent of a related or subordinate party subservient to them, for at least 183 days of it; a power that needs anyone else's consent, such as an independent trustee's or protector's, does not count.^253,254 Once the exception fails for a year it is lost for good.²⁵⁵ Separately, a portion already treated as owned under §676, or under §677 other than its life insurance rule, on September 19, 1995 keeps that owner for the property it held that day, for as long as it stays so treated.²⁵⁶ A U.S. settlor of a trust with no U.S. beneficiary can still be owner under another rule, for example by keeping a power to take the property back,²⁵⁷ and a U.S. beneficiary who alone can take the property is owner of it.^258,244

When a settlor who was not a U.S. person dies, the revocable-trust and spouse-only exceptions end for that settlor's portion, because the person left with the power, even a surviving spouse, is not its grantor;²⁵⁹ a U.S. person who alone can take the property, or a U.S. person who funded the trust, can still be owner, and otherwise the portion is taxed as a non-grantor trust.^258,119,245 When a portion stops being owned by a U.S. person, the owner is treated, for the gain rule, as transferring it to a foreign trust that day.²⁶⁰ At death the gain is excused only if the trust's basis in the property is then reset to its value at death under section 1014(a), as where the owner could still revoke the trust;²⁶¹ otherwise the owner is treated as transferring it immediately before death and recognizes the gain.²⁶²

Jersey law lets a settlor keep powers to revoke, vary or amend the trust, to appoint and remove beneficiaries and to direct its investments without affecting its validity,^232,233 and keeping them does not of itself make the settlor a trustee;²⁶³ the U.S. rules above, not Jersey law, decide whether such a power makes anyone owner.^244,257

No relief: no income tax treaty, and the information agreements change neither U.S. tax nor these forms.

No treaty: the United States has no income tax treaty with Jersey,⁹¹ and its treaty with the United Kingdom covers only Great Britain and Northern Ireland.⁹² The tax information exchange agreement and the FATCA agreement (under the U.S. Foreign Account Tax Compliance Act) between the United States and Jersey change neither U.S. tax nor these forms: they provide for the two governments to exchange information.^93,94

Part I for whoever funds it, Part II and Form 3520-A for an owner, Part III for whoever receives a distribution.

Part I can apply if a U.S. person transfers property to the trust, for the year of the transfer.¹¹⁸ A transfer to a foreign trust is treated as a sale, and you recognize any gain on what you transfer;²⁶⁴ a transfer is not, to the extent anyone is treated as owning the part it funds.²⁶⁵ Part I also applies on the death of a U.S. citizen or resident who was treated as owner of any part of the trust, or whose gross estate includes part of it, and to property that passes to the trust by reason of a U.S. person's death; the executor reports it, whether or not the executor is a U.S. person.¹²⁰ The gain rule does not apply to property that passes to the trust by reason of a U.S. person's death, if its basis in that property is set under section 1014(a).²⁶¹ Part II and Form 3520-A can apply if a U.S. person is treated as owner: the owner files Part II and makes sure Form 3520-A is filed, or files a substitute, each year.^103,108 Part III can apply if a U.S. person receives a distribution, for that year.¹⁰⁹ Form 4970 can apply if a distribution from a non-grantor trust carries out income the trust kept in earlier years: that is an accumulation distribution, taxed with an interest charge.¹⁹² It can also apply to a transferor taxed when the trust gains a U.S. beneficiary, as the owner step says.²⁵² Rev. Proc. 2020-17 does not apply: it covers only retirement trusts and medical, disability, or educational savings trusts.²⁶⁶