About the Isle of Man
The Isle of Man is the ideal location for establishing or relocating a business due to its position as an innovative financial centre offering low taxation in an excellent regulatory regime.
The Isle of Man is situated at the heart of the British Isles in the middle of the Irish Sea between Ireland (31 miles) and the United Kingdom (31 miles). The island is 33 miles long and 13 miles wide with a population of approximately 80,000 residents.
The Isle of Man is a beautiful island with unspoilt beaches, mountainous countryside, sweeping coastline and bustling townscapes. Such scenery has provided many a backdrop for the film industry in recent years, the island having doubled as Cornwall, Yorkshire, Norfolk, Hampshire, Brighton and even the Caribbean.
The island is a self-governing dependent territory of the British Crown which is not part of the United Kingdom, but for which the Crown has the responsibility for ensuring the good government of the island and for its external affairs, but the Island's democratically elected government exercises full control of its internal affairs and territorial waters. By long standing convention, the U.K. Government does not legislate for the Island except with the specific consent of the Island's Government.
The High Court of Tynwald is the Parliament of the Isle of Man, is over 1,000 years old and is considered to be the oldest Parliament in the world with unbroken existence.
Taxation - Personal Income Tax
The island has its own income tax and customs and excise framework and is independent from the United Kingdom in respect of direct taxation. Income tax is low, the standard rate being 10% and the higher rate being 20%.
There is also a personal taxation cap which means that an individual's annual personal tax liability is limited to £175,000 irrespective of income generated subject to a five year election or £350,000 if jointly elected. For any elections commencing from the 2020/2021 tax year, the maximum income tax liability for an individual will increase to £200,000 and £400,000 for a jointly assessed couple.
There are also no stamp duties, capital gains tax, wealth tax, capital transfer tax, inheritance tax or death duty imposed in the Isle of Man.
The standard rate of corporate income tax in the Isle of Man is 0% and either 10% or 20% received by a company from any of the following sources:
- banking business income - 10%
- land and property income from Isle of Man sources - 20%
- retail business - profits above £500,000 - 10%
The Isle of Man economy has seen four decades of continued economic growth.
The Island's Government has positively encouraged economic growth over the decades by creating a favourable tax regime and suitable legislative framework for expansion.
The Isle of Man is an established and respected international finance centre, built on political and fiscal stability, low taxation and a fully supported modern infrastructure.
The Isle of Man benefits from a special relationship with the European Union which allows the streamlined movement of goods between the Island and the Union. The Isle of Man is the only offshore financial centre where zero tax rate companies may operate within the European Union VAT system and trade freely within the European Union.
Businesses trading in the Isle of Man may apply to register for VAT in the Isle of Man providing that they can show that day to day management and control of the business is effected from the Island. Once VAT-registered, any Isle of Man business is subject to the normal UK/EU VAT rules.
Registration for VAT is compulsory for companies making taxable supplies which at the end of any month, the total value of taxable supplies made during the preceding 12 months (on a rolling 12-month basis) exceeds £83,000. Also, should a company expect that the value of taxable supplies within a 30 day period will exceed £83,000, then registration will be necessary. The VAT rate currently stands at 20%.
Quality of Life
The Isle of Man has remained in the fortunate position of being able to offer affordable high quality commercial and residential accommodation in an open and spacious environment whilst many other offshore jurisdictions have become expensive and overcrowded.
The island has an exceptional health system, high education standards, and excellent transportation links and communication systems and whilst being a modern progressive environment maintains a traditional independence and proud heritage.
A very useful overview of the Isle of Man is provided by www.locate.im.