About Us >> The Isle of Man

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• History
• Economy
• Legal
• Banking
• Taxation
• Security & Confidentiality
• Amenities

History

Of Celtic origin, the Isle of Man has a colourful past having been conquered by the Vikings in the 10th Century. It was a predominantly fishing and farming community until the advent of tourism at the end of the 19th Century. By virtue of the world famous Isle of Man TT motorcycle races the island attracts hundreds of thousands of visitors to its shores each year. Whilst tourism remains important to the island's economy, the offshore financial sector, from its beginnings in the 1960s, is now the largest industry in the Isle of Man and contributes 42% of the Gross National Product. The Government recognises the importance of this industry and actively promotes its continued expansion. The current population of 80,000 is a significant indicator of the growth, prosperity and stability of the island's economy. With a highly skilled workforce serviced by the latest technology, successful individuals and companies are being attracted to the island by the high quality of life in an attractive, unspoilt and relatively crime-free environment.

The Isle of Man, situated in the centre of the British Isles, is an internally self-governing dependent territory of the crown that is not part of the United Kingdom. Tynwald, the island’s 1000-year-old parliament, makes it own laws and oversees all internal administration, fiscal and social policies. Both individuals and companies who are resident in the Isle of Man for income tax purposes enjoy complete independence from the United Kingdom on matters of direct taxation.

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Economy

Offshore banking, manufacturing and tourism are key sectors of the island’s economy. The Manx Government’s policy of offering incentives to high technology companies and financial institutions is evident in the financial assistance and grants it offers to new and relocating businesses. These grants can be as much as 50% of the costs. The Isle of Man, although NOT a member state of the European Union, enjoys free access to the European Markets. There are no restrictions on relocation to the island other than those under the Immigration Act. Most people coming to the island will seek employment and for these people a work permit is required.

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Legal

Lawyers in the Isle of Man are known as advocates and combine the roles of solicitors and barristers in England. Although English law does not extend to the Isle of Man, the Manx legal system is based on the principles of English common law. In relation to contract, tort, family law and social security Manx law is very similar to English law. But in all other respects Manx law has been developed to meet the island’s special circumstances, particularly with regard to direct taxation, company law and financial supervision. The principal sources of law are Acts of Tynwald and the orders and regulations made under these Acts. Tynwald has power to pass Acts on any subject, but all Acts of Tynwald require the Royal Assent of the Queen.

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Banking

The island’s banking industry is dominated by subsidiaries or branches of the main UK clearing banks. The majority of banks in the Isle of Man are engaged in providing private banking services to expatriates of the United Kingdom and to foreign nationals. The growth in other areas of the island’s finance sector including captive insurance, life assurance, collective investment schemes, investment management and ship management means that these organisations have sums of money to lay off in the money markets and increasingly will require investment management services. Some banks also act as custodians and trustees to collective investment schemes.

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Taxation

The island has its own Income Tax division and Customs and Excise department. The island’s taxation system is quite separate from that of its neighbour. There are no death or estate duties, capital transfer or gift taxes, nor capital gains or wealth taxes.

The Isle of Man is a low tax area with a standard rate of income tax of 10% on the first £10,500 of taxable income and higher rate of 18% on the balance for all individuals. The higher rate of tax is capped at £100,000.00. A single person’s allowance for the 2006/2007-tax year is £8,670. The question of residence for an individual is determined on standard taxation principles. Being present in the island for 6 months in any income tax year will make that person resident. Equally, regular visits to the island may well create a residence situation.
A double taxation agreement exists between the United Kingdom and the Isle of Man. This was entered into in 1955 and provides for granting of relief from double taxation on certain incomes passing between the two countries.

From 6 April 2006, the standard rate of income tax is 0%, applicable to all forms of income received by companies, except income received by licensed banks from banking business and income from land and property in the Isle of Man, which is taxed at a rate of 10%. Resident companies pay tax on their worldwide income; non-resident companies are taxed only on income sourced in the Isle of Man. A company is resident in the Isle of Man if it is incorporated in the island or if it is managed and controlled there. Resident companies pay an annual charge, which is currently set at £250 for the 2006/2007-tax year. From 6 April 2006, companies having Manx members may, in certain circumstances, be required to pay a distributable profits charge (DPC) on behalf of those members.

The trustees of a Manx trust, in which the settlor and beneficiaries are Manx resident, are liable to Manx income tax at 20% on income, which is not distributed to the beneficiaries. However where the settlor and the beneficiaries are non-residents, the trustees will have no liability provided that the income, other than ‘approved’ interest and dividends, arises outside the island.

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Security & Confidentiality

Potential clients are usually concerned that assets are safe and secure. The Isle of Man Government's stated intention is to ensure the reputation of the offshore industry in general, but of the Isle of Man in particular. It is a criminal offence to accept funds that one suspects may have arisen from money laundering. The Government, through the Financial Services Commission and the Insurance & Pension Authority, supervises and regulates the whole financial services industry. The Isle of Man is one of the few low tax areas that has this tight regulation as well as operates a Depositors' Protection Scheme. All in all, this makes the Isle of Man possibly the most regulated and secure offshore centre.

The Isle of Man has strict legislation to prevent money laundering and criminal activity, as it only wishes to attract reputable business. Equally the Government is aware of the requirement for confidentiality. The regulations therefore put much of the responsibility onto professional firms with appropriate penalties where these responsibilities are not met. Whilst we therefore need to be fully aware of the profile of our client, there is no requirement, unlike some jurisdictions, to disclose the beneficial owner of a company to a government authority, central bank etc. There is no compulsory registration of trusts or filing of accounts for private companies or trusts.

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Amenities

There are no restrictions on buying properties in the Isle of Man. Homes on the island range from modern apartments to large family homes and country estates. There is an abundance of space for new offices and for many recently renovated buildings across the island, where costs remain extremely competitive.

Frequent flights and ferries to the UK and Ireland service the Isle of Man. Flight times are about an hour to London and around thirty minutes to Dublin, Liverpool or Manchester. Flights are also available to other city airports throughout the UK and Ireland.

The Isle of Man provides exceptional education facilities and is justly proud of its state and private provision. Schools have small size classes with a wide-ranging curriculum and boast excellent academic, vocational and sporting facilities.

The island has a relaxed pace of life, set amongst the islands spectacular scenery, but yet still has a bustling social scene boasting bars, nightclubs, casinos, cinemas, a theatre, modern hotels, spas, public houses, resultants and much more.

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