Transcript
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Welcome to the transcript of our video, Things to consider when relocating to the Isle of Man. This page provides the full text version of the content, making it easy to read, reference, or search through specific topics covered in the video. Whether you prefer reading over watching, want to quickly scan for information, or need an accessible alternative to video, this transcript is here to help.
Introduction
Yash Naidoo: If you’re looking to relocate to the Isle of Man, what are some of the things that should be considered.
To answer this, we have invited one of the tax specialists we work closely with from Hotchkiss Group, Paul Hotchkiss, to share some of his thoughts from a tax perspective.
Becoming an Isle of Man Tax Resident
Paul Hotchkiss: Becoming an Isle of Man tax resident is a straightforward process. There are forms to complete and once done, you’ll be in the system.
Additionally, the Isle of Man tax system is also relatively straightforward.
Many of our clients hold assets, which have been specifically structured to take into account the tax laws in the country they live in. These assets may be held in trusts, companies established all over the world and include specific asset types such as art collections, fine wine, yachts, and aircraft. The ownership of assets and the tax implications of holding certain assets may therefore need to be considered before you arrive on the Isle of Man.
Complexity Within a Simple Tax System
The Isle of Man has a very simple tax system, but oddly, simple laws can result in complexity. This may sound counterintuitive, but because the Isle of Man tax laws are very old, they do not always cater for the plethora of investment types and structures, unlike many larger economies.
Thus, considering tax with regards to some asset types and holding structures can be a bit like fitting a square peg in a round hole. For this reason, you may want to consider obtaining upfront clearances from the Isle of Man tax office so you know how your investments and income deriving from them will be treated.
The tax officers are very helpful, and any clarifications obtained can be relied upon, and thus this will give you certainty and peace of mind.
Tax Cap and Key Employee Treatment
The Isle of Man tax rules can limit annual income tax to 200,000 pounds if your income is on average above a million pounds per annum over a period of five years or more. To access this upper limit requires planning and is usually done by advance agreement with the Isle of Man Tax Office.
Another incentive, often regarded as better than the tax cap is the so-called Special treatment for key employees. If you intend to start a business or set up a family office, which will employ people, you may be able to restrict the income on which you are taxed. This outcome can be enjoyed for three years. Both the tax cap and the special treatment for key employees can give you tax freedom and enable agility when it comes to restructuring.
Reorganising Assets After Moving
Once you are Isle of Man tax resident, you can reorganize your assets with relative ease to make your asset ownership simpler. This is especially important if the country from which you have relocated has resulted in complex structures which have evolved over time.
If you are leaving your current country of residence, you may need to consider how local taxes will operate on exit. It is advisable to cease residence cleanly, and a fundamental importance is to take tax advice, to take into consideration all of your circumstances.
It is very easy to focus on the matters which you believe are relevant, rather than looking at everything in the round.
The advice you should get should include how you might interact with a country you have left once an Isle of Man tax resident. If you intend to return to the country or retain assets and or businesses there, you’ll need to assess whether you will have any legacy tax issues once you have left. This is important in that it is very easy to get dragged back into a jurisdiction tax wise after you have left.
In addition, if you have legacy issues, you will also need to assess what the Isle of Man tax position will be once you have become Isle of Man tax resident.
Our Approach at Nedbank Private Wealth
Yash Naidoo: At Nedbank Private Wealth, we believe it is vital to learn what is truly important to our clients, their values, goals, and future plans.
We believe that this approach gives us the best platform, not only to help our clients meet their goals, both now and in the future, but also to support and guide in areas we think you may find interesting or financially beneficial.
Our team of private bankers and wealth planners are able to help our clients make informed decisions about things like way or how to structure accounts and investing based on a plan and a cashflow model to meet their personal goals and aspirations. Get in touch to see how we can help you.
We have extensive experience across multinational jurisdictions and partnerships with specialists who can advise on your specific legal and tax needs.
Contact your private banker to schedule a wealth planning discussion or visit our website for more information.