1. PERSONAL TAXATION

  • INCOME TAX RATES

IOM

RATE

£1 - £10,500

10%

Over £10,500

18%

Non-Resident Rate

18%

Individual income tax liability is capped at £100,000 or £200,000 if jointly assessed

 

UK*

RATE

£0 - £2,440 on savings income only

10%

Basic Rate

20%

Higher rate on income over £37,400

40%

*A rate of 50% on those earning in excess of £150,000 will be introduced in the UK for the tax year 2010/11.

  • PERSONAL ALLOWANCES

IOM

£

Single Person

9,200

Married Couple

18,400

Non-Resident

2,120

Age Allowance

2,000

UK

 

Under age 65

6,475

Age 65 – 74

9,490

Age 75 and over

9,640

UK Married Couple/Civil Partners

 

(minimum) at 10% where at least one spouse/ partner born before 06/04/1935

2,670

Age less than 75 and born before 6/4/1935

N/A

Age 75 and over

6,965

  • IOM MORTGAGE INTEREST AND LOAN INTEREST

Tax relief is granted pound for pound in the Isle of Man on interest paid to Manx resident lenders up to £15,000 per individual.

  • INCOME TAX: EXAMPLE CALCULATIONS

Taxpayer, single, aged 30 with an income of £100,000 pa.

IOM:

£

Total income

100,000

 

Less allowance

(9,200)

 

Taxable income

90,800

 

£10,500 x 10%

1,050

 

£80,300 x 18%

14,454

 

Tax payable

15,504

UK:

£

Total income

100,000

 

Less allowance

(6,475)

 

Taxable income

93,525

 

£37,400 x 20%

7,480

 

£56,125 x 40%

22,450

 

Tax payable

29,930

  • INHERITANCE TAX (IHT)

IOM

There is no charge to IHT in the Isle of Man.

UK

The threshold at which IHT is payable is currently £325,000 above which IHT is payable at 40% (subject to exemptions and reliefs).

  • CAPITAL GAINS TAX (CGT)

IOM

There is no charge to CGT in the Isle of Man.

UK

Gains on chargeable assets are currently taxed at 18%.

  • VAT

Both the IOM and UK VAT rates are currently 15% returning to 17.5% from 1st January 2010.

Under the flexibility provided by the Customs & Excise Agreement with the UK, the Isle of Man applies a reduced 5% rate of VAT to certain supplies including hotel accommodation, gas and electricity.

  • STAMP DUTY

IOM

There is no stamp duty payable in the Isle of Man.

UK

Stamp Duty Land Tax (based on consideration)

Commercial property:

Over £150,000 - £250,000

1%

Residential property:

Over £175,000* - £250,000

1%

(*£125,000 from 1/1/2010 or £150,000 in disadvantaged areas)

All property:

Over £250,000 up to £500,000

3%

Over £500,000

4%

2. CORPORATE TAXATION

  • ISLE OF MAN COMPANY TAX RATES

General rate of corporate income tax = 0%

Higher rate of 10% corporate income tax on income from the following sources:

  1. Income arising from banking business
  2. Income derived from land and property situated in the Isle of Man
  • ATTRIBUTION REGIME FOR INDIVIDUALS

For accounting periods commencing on or after 6th April 2008 Isle of Man resident individuals having an interest in a "relevant company" will be liable to Manx income tax on their share of attributed profits from that company.

  • CORPORATE CHARGE

An annual charge of £250 is collected as part of a company's annual return filing fee.

  • UK CORPORATION TAX

PROFITS (£)

RATE (%)

0 – 300,000

21

300,001 – 1,500,000

29.75

1,500,001 and over

28

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.