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Isle of Man Government
Reiltys Ellan Vannin
Isle of Man Government Crest

Income Tax

Government Offices
Buck's Road, Douglas
Isle of Man IM1 3TX
Enquiries:
+44 (0) 1624 685400

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You are here: www.gov.im - Treasury - Income Tax and National Insurance - Individuals - Employed - FAQs

FAQs

Residents | New residents | Returns / Penalties | Personal Allowance Credits (PAC) | Tax Relief | Non-residents | Payments

Residents

New residents

Q How long am I allowed on the Island before I become resident?
AThis depends on the information you give on form R25. As a general rule if you are visiting the Island temporarily you will become resident for income tax purposes if you stay for more than six months in any tax year. If you visit and decide to stay permanently you will be asked to provide full details of the date you first arrived and when you made the decision to stay. If you intend to move here permanently you will be classed as resident from the first day of your arrival. If you live elsewhere and make, or intend to make, regular visits which in total exceed 90 days per tax year you may also be classed as resident here for tax purposes. It is recommended you read the fuller details available in PN 144/07 or contact the Income Tax Division to discuss this as soon as possible.
Q My spouse/civil partner has moved to the Island with me. They don't work. Do they get a tax allowance and what happens to it?
AWhen you register for tax, you must bring a copy of your marriage or civil partnership certificate for our records. You will get the choice to be independently or jointly taxed. If you choose joint taxation, you will be able to transfer your personal allowances between you during the tax year. So, if only you are working, you may have your spouse/partner's allowances. At the end of the year you will complete one tax return with both your income details. Please note that either or both of you can be pursued for any outstanding tax liability. If you choose independent taxation, you will not be able to transfer your allowances and you will each complete your own tax return. You will be responsible for your own tax liability only. If you make no choice at all, you will automatically be taxed independently.
Q How long do I need to be resident not to qualify for inheritance tax?
AAs there is no inheritance tax on the Isle of Man, you should ask the tax authority where the asset/property is held.
Q Q. What happens if I’m resident elsewhere and pay tax in different jurisdictions?
AIt is possible to be resident for income tax in more than one jurisdiction. As every case is different, you should contact the Income Tax Division as soon as possible for further information.
Q I have bought a holiday home on the Island; what do I need to do?
AYou should contact the Income Tax Division as soon as possible for further information.
Q I am starting a job soon; how do I get a code?
ATax codes can only be issued when employment has been confirmed. Your employer should contact us, once you have started. In the meantime, your employer should use an ‘emergency’ code to calculate your tax
Q I am starting self-employment; how do I register? How will I pay Income Tax and National Insurance?
AYou should complete the ‘CWF1/R133 Commencement of Self-Employment’ form and hand it in to the Division. You should also register for Class 2 National Insurance contributions by contacting the National Insurance team on telephone number 01624 685177. Your total tax liability and Class 4 contributions (National Insurance) will ordinarily be collected once your tax assessment has been raised at the end of each tax year. You should make provision during the tax year to pay these liabilities.

Returns / Penalties

Q Do I have to complete a return every year?
AAll taxpayers (with few exceptions) are required to complete and submit a tax return every year. In certain circumstances you may be suspended from the requirement to submit returns, in these cases you will receive a letter from the Division advising you of this.
Q Can anyone else complete my tax return?
AYes, but only you can sign it. In the case of a jointly assessed couple, both spouses or civil partners must sign the return.
Q Where can I file my tax return?
ATax returns can be handed into the Income Tax Division ,or posted to the Income Tax Division at Government Offices, Bucks Road, Douglas, Isle of Man. Returns can also be submitted online using Online Tax Services. To register and enrol please visit www.gov.im/onlineservices and select the 'Income Tax' service.
Q Who can I speak to for advice regarding filling in my tax return?
AYou can contact General Enquiries on 01624 685400 or visit the Division at the above address. Officers also make visits to Citizen Advice Bureaux and care homes to help individuals complete their return forms. In certain circumstances home visits may be made.
Q Are residents liable to penalties?
AYes, if you do not submit your return within six months of the date of issue then a £100 penalty will be charged. A further £200 penalty will be charged if the return is still outstanding six months later. Payment of the penalty does not mean that the return does not need to be submitted.

Personal Allowance Credits (PAC)

Q I've never had an income tax return before. Why have I been sent one this year?
AIf you have never received areturn before, it is likely that all of the income you receive is either below the personal allowance or not subject to Isle of Man income tax so there has been no requirement for you to make annual returns of income. If you haven't received a return for a number of years, it is likely that the Assessor was satisfied that your gross income was not sufficient to generate an income tax liability, and your requirement to submit a return each year was suspended. You have been sent a return this year in order to give you the opportunity to declare that your gross income is below the required levels, and to enable you to make a claim for a PAC.
Q My gross income is consistently below the £9,300 limit. Will I have to complete a return and make a PAC claim every year?
AWhere the Assessor is satisfied that your gross income is likely to be less than the Low Income Limit (£9,300 for a single person, or £18,600 for jointly assessed couple), he may suspend your requirement to submit a return and make claims for the PAC every year. Your PAC Notice and payment will be issued automatically each year.
Q What should I do if my circumstances change?
AIn order to ensure that the Division's records are as accurate as possible, you (or your appointed agent) should inform us as soon as possible if any of the following things happen:
  • Changing address
  • Getting married / Entering into a civil partnership
  • Separating from your spouse/civil partner
  • Becoming a single parent
  • Entering full-time education outside the Isle of Man
  • Leaving the Island temporarily or permanently
  • Ceasing work due to ill-health
  • Retirement
  • Moving into residential accommodation due to age
  • Moving into residential/nursing accommodation due to ill-health
Some of these factors will have an effect on your eligibility to claim a PAC, whilst others will have an effect on the other types of tax allowances you may claim. By informing the Division as soon as you can after a change in your circumstances, you can ensure that you make a claim for all the tax allowances you are entitled to.
Q Can I still claim for a PAC if I am in full-time education outside the Isle of Man?
AFor payments relating to the tax year commencing 6 April 2010 and subsequent years, individuals who are in full-time education will no longer be eligible to receive a PAC. For tax years prior to this date, providing you are resident in the Isle of Man for income tax purposes, and were over 18 at the start of the year of assessment, you may be entitled to make a PAC claim. An important factor which will be taken into consideration is whether you intend to return to live in the Isle of Man when you complete your course, and whether you return to the Island outside term-time. You may be asked to provide proof of the dates and duration of these visits to support your claim. If you undertake any paid employment, or receive any benefits or payments made to you under a Deed of Covenant during the year, you must also declare these amounts on your income tax return. If the income or benefits you receive have been taxed in the country in which you study they may not be taxed further in the Isle of Man, but they will be included when calculating your gross income for PAC purposes.
Q My income tax liability is nil. Why can't I claim a Personal Allowance Credit?
APACs are intended to benefit those people who are genuinely on a low income, rather than those whose taxable income is low because of extra allowances and deductions, so the fairest way to award them is to calculate them against a person's gross annual income.

Tax Relief

Q Can I get tax relief for my life insurance premiums?
ATax relief for life insurance premiums was abolished with effect from 6 April 2008. Any premiums paid before 5 April 2008 will receive tax relief in the tax year in which they were paid.
Q I've got Private Medical Insurance, how is it treated in the Isle of Man?
APrivate Medical Insurance qualifies for tax relief provided it meets certain criteria - you must be resident in the Isle of Man for tax purposes and pay the premiums on an eligible contract. The contract must insure either you or a tax resident relative or friend. The insured person must be at least 60 years old, or if the insured are a jointly assessed couple, then one partner must be at least 60 years old.
Q Is my contract eligible?
AOnly if it provides cover for a person aged 60 years or over; or a jointly assessed couple where at least one of the partners is aged 60 years or over. The contract should provide cover for medical or surgical treatment given or supervised by a qualified medical or dental practitioner..

A contract will not be eligible if it provides any of the following items:-

  1. Cash benefits in excess of £100 per night while undergoing treatment in a hospital bed
  2. Dental treatment carried out by a general dental practice
  3. Eye tests and other eye treatments not carried out in a hospital
  4. Plastic surgery carried out for cosmetic reasons (i.e. a facelift)
  5. Policies that provide cash payments for loss of limbs or dismemberment
  6. Schemes that provide cash benefits only
Q Is there any limit to the amount of tax relief I can claim ?
AYes. The maximum deduction for private medical insurance premiums is limited to £1,800 per person per annum or £3,600 for jointly assessed couples were both partners are 60 years or over and insured. From 6 April 2012, the tax relief for private medical insurance premiums is granted at 10%. There is no limit to the number of policies that you pay, as long as they are eligible.
Q How do I claim relief?
ATo claim tax relief you will need evidence of payment of the contract premiums. This should be forwarded to the Income Tax Division with your completed return. You should complete the section called Private Medical Insurance with the details of the scheme with your first claim. If you pay tax through the ITIP scheme on your employment or occupational pension, you should contact the Income Tax Division as soon as you start paying premiums so that your code can be altered to give you tax relief immediately. You will be asked to give full details of the insured person and the name of the scheme and provider.
Q Can I transfer an existing contract that is not eligible?
AYes, it may be possible to transfer to an eligible scheme. You should contact your insurance provider for advice. If you have a family contract which is not eligible, you may be able to separately insure the parties to benefit from eligible schemes for those of the appropriate age. If you have an existing contract but the insured parties are not yet age 60, it may become eligible when they reach that age. It will depend on the cover provided and all the previously mentioned conditions and any new conditions that may be brought in as to whether it will be eligible. If an existing contract becomes eligible on the insured reaching age 60, you will get tax relief on all premiums paid after their 60th birthday.

Non-Residents

Q Why have I received a tax return if I am not resident in the Isle of Man?
AThis is because you have Manx source income on which you are liable to Manx income tax.
Q Are non residents liable to penalties?
AYes, if you not submit your return within six months of the deemed date of issue then a £100 penalty will be charged. A further £200 penalty will be charged if the return is still outstanding six months later. Payment of the penalty does not mean that the return does not need to be submitted.
Q Do non residents receive a personal allowance?
AYes. From 6 April 2006, non residents have received a personal allowance. Click here for current rates and allowances. Please note that from 6 April 2010, the allowance has been reduced to £0.

Payments

Q How can I make a payment?
AYou can make a payment of any liability in the following ways
  • Using Online Tax Services - click here for further details
  • Visit the Income Tax Division and pay by debit or credit card, cheque or cash. Please bring your payment counterfoil with you
  • Send a cheque to the Income Tax Division. Please enclose the payment counterfoil
  • Phone the Income Tax Division on 01624 686420 and pay by debit or credit card