The Isle of Man presents a compelling proposition for ultra high net-worth individuals. It has no capital gains or inheritance tax and has no intention of introducing them.

The Island also has a particularly generous set of personal tax allowances and other personal benefits. For example, the highest rate of tax, just 18%, kicks in at an overall income level of £19,170 and is capped at £100,000 per individual per year. This means that if you earn more than £570,000, your maximum tax liability is £100,000 – in the UK, someone earning this level of income would already pay around £220,000 in tax and then 40% on every further pound. Husbands and wives have the option of being jointly taxed to make maximum use of their allowances, which can be amalgamated.

Wealth management capability

The Island also makes an attractive destination for ultra high net-worth entrepreneurs who may wish to operate a business on the Island. Most business people would concur that the important word in the international business lexicon is ‘certainty’ – the ability, as far as is possible, to be confident in forward planning. The Isle of Man has sought to provide this with the introduction it its new corporate tax strategy.

From April 2006, a standard zero rate of corporate tax will apply to the vast majority of companies - while banks will pay just ten per cent on their normal trading profit with all other income, including liability of reserves, zero-rated.

The Isle of Man also offers specialist cross-border banking through its highly skilled local experts, together with a comprehensive service for Corporate; Institutional; Private and Expatriate banking. The Island’s service providers are dedicated to quality of service, combining knowledge and experience with efficient and rapid response.

The continuing rise in the number of ‘mobile employees’ working around the world has also resulted in a steady increase in international pension schemes based in the Isle of Man. A total of 90 schemes have been registered since the Government launched its initiative to attract the pension provision of multi-nationals and wealthy expatriate workers.

Corporate and professional structures

The Isle of Man hosts more licensed Corporate and Trust Service Providers than any other jurisdiction. Specialised services to clients e include accountancy, legal and tax advice; corporate and fiduciary services; and trust and company administration.

Entities such as trusts and companies managed by Corporate and Trust Service Providers based on the Island benefit from its tax neutral platform and can therefore be used as an integral part of any international tax planning strategy. Provisions contained in the new Companies Act 2006 are expected to have even broader appeal in the specialist offshore sector.

Key elements include: greater flexibility of use; much reduced and simplified reporting; use of regulated corporate directors; increased focus on registered agents – a role performed by CSPs – for the retention of company records; and use in protected cell form and as a vehicle to easily re-domicile to and from the Island.

An area of growing importance is providing specialist advice to businesses using Isle of Man company structures to assist companies seeking listings on London’s Alternative Investment Market (AIM).

The Island’s continuing success is rooted it its diverse economy. Film-making, satellite commerce and other new technology driven industries are thriving alongside the more traditional ones. Innovation remains the watchword with both Government and industry continuously seeking out new markets.

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.