In the February budget, Treasury Minister Allan Bell MHK introduced a much talked about personal income tax cap of £100,000 which is designed to attract entrepreneurial investment and stimulate economic activity in the Island. This has created a great deal of interest from a number of high profile wealthy entrepreneurs who are now looking at the Island as a desirable residence with the attendant benefit of establishing a new business.
To introduce prospective new residents to the Island we have developed a Relocation Programme which includes, as part of the larger overall programme discreet one-to-one visits hosted by Isle of Man Finance often in conjunction with the Island’s financial organisations, who can now look to manage the financial affairs of their wealthy clients while promoting the Island as a cost-effective base and home from where they can conduct their business.
Our initial research shows that visits to the Island have resulted in many high net-worth individuals actively considering relocating here; whilst some have been surprised and inspired by the wealth of events and activities that the Island has to offer. The famous TT motorcycle races for instance, which took place recently, creates a carnival-like atmosphere which combined with world-class racing transform the Island over the race period into a motor enthusiast’s paradise.
And anyone relocating to the Island will be in good company too, over the years many famous names have also set up home here such as well known racers in both Formula 1 cars and Super bikes, as well as several famous footballers and many stars of television and film.
BUSINESSES ARE SET TO PROSPER TOO
The new initiative runs in tandem with the Isle of Man’s introduction of a new ‘zero rate’ corporate tax strategy. The Treasury believes the new business and personal fiscal incentives present an unparalleled attraction when set alongside the Island’s state of the art communications, business infrastructure, scenic attractions, sporting interests, general high quality of life and low crime.
Zero rate corporate tax means just that – the rate of corporate tax for businesses on their profits is 0%. (There are a few exemptions to the rule such as businesses that hold a Banking Licence and those that derive an income from Manx property). Government is also considering further movement in relation to corporate tax and is currently consulting on the possibility of capping corporate tax for those remaining businesses i.e. banks, that are currently paying 10% rather than the zero rate corporate tax.
FAVOURABLE PERSONAL INCOME TAX REGIME
As regards personal income, the Isle of Man tax regime compares very favourably with neighbours like the United Kingdom. In comparison with the UK’s 40% top rate of income tax the Island’s personal top rate is just 18%, therefore in the UK, a married couple with a combined annual income of, say around £570,000 (net of allowances), would have a tax liability of almost £220,000, whilst in the Isle of Man their tax bill would not exceed £100,000 – which is a very significant reduction.
And in addition to this there are no capital gains or inheritance taxes, all of which clearly demonstrates the Isle of Man encourages personal wealth creation.
Steven Beevers, Deputy Head, Isle of Man Finance believes that the Island has positioned itself as one of the most desirable locations within the UK in which to live and we would be delighted to talk to wealth management advisers and their clients about the benefits we have to offer.
Isle of Man Finance has a dedicated Relocation Service to assist with every aspect of moving to the Island.
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