Isle of Man Overview

Isle of Man

The Isle of Man is a traditional tax haven principally used by the UK and Ireland, and the bulk of its wealth comes from UK property holding structures. Its main features are 0% tax companies, a residency programme with a cap on income tax aimed at High Net Worth Individuals, 0% tax trusts and is also a popular choice for online gaming. The Isle of Man is a large offshore banking center and has a significant Maritime practice. For more information on offshore centers generally (and particularly why we do not recommend their usage for EU nationals) please see our main article. The Isle of Man is unique amongst offshore centers in allowing access to EU VAT system (despite not being a member the Isle of Man is part of the UK for VAT purposes only). It is our contention that if access to the EU VAT system is required an EU company will generally be more appropriate. It is true that no EU company offers 0% tax however the rate can be low as 5% in Malta or even effectively 0% through the use of a UK LLP. The Isle of Man has survived many attacks from the international community mainly lead by the UK. Currently the Isle of Man along with the Channel Islands are coming under renewed pressure. In anticipation of this the Isle of Man is currently reviewing its tax system in anticipation of another attack. In spite of all those concerns the Isle of Man remains one of the most well-regulated offshore centers and local providers are generally very diligent in applying the highest international standards of Anti-Money Laundering (AML) and Preventing the Financing of Terrorism (PFOT) rules. 

Isle of Man Trusts

The Isle of Man (like Gibraltar and the Channel Islands) is a popular choice for trusts. Unlike Gibraltar is does not have the option to register trusts but it is a very well regulated and cutting edge trust destination. The Isle of Man courts apply trust law in a consistent and predictable way and the Isle of Man has been instrumental in shaping international trust law as the UK courts rule on its most complex cases. Isle of Man trusts are not cheap, in an international context, but they are generally very well operated.

Isle of Man Maritime

The Isle of Man is a popular destination for yacht registration given its administrative simplicity, low registration costs and lack of tonnage tax. Ownership of vessels in the Isle of Man is highly flexible including by local registered Limited Partnerships. Vessels flagged in the Isle of Man fly the Red Ensign and are entitled to UK consular services and Royal Navy protection.

Isle of Man Private Companies

Isle of Man companies pay 0% corporation tax, are straightforward and reasonably cheap to form and have historically been used extensively in global tax planning most especially by the English and Irish. Their main use has been the holding of UK property but they are a very flexible vehicle. Isle of Man is currently under review (along with the Channel Islands) and it is our opinion that the use of such companies is likely to be greatly curtailed.

Isle of Man Public Companies

There is only one point of to recommend Isle of Man Public Companies in an international context which is that the 2006 Companies Act has done away with the notion of share capital but retained the suffix 'plc' or 'public limited company' meaning that it is effectively possible to register an Isle of Man private company which appears to be a plc at a relatively very low cost and with no capitalization requirements. This is a very cheap way to form a vehicle which has a name such as ABC Plc but which is not really a plc by any other standard.

Isle of Man Foundations

Isle of Man foundations were introduced into the law in 2012 and to date only one foundation has ever been registered (by the firm which lobbied for the introduction law change). As a vehicle Isle of Man foundations are not without interest however given their untested nature, uncertain costs and timescales we recommend using one of the established service providers until this industry takes off.