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New Residents

I will be taking up residence in the Isle of Man is there anything I need to do?

As soon as possible you should complete Form R25 Registration for Manx Income Tax and return it to the Income Tax Division, or contact the Assessor of Income Tax so that appropriate returns and any advice on income tax liability can be issued.

It is important to remember that your employer is not responsible for registering you for tax. Your application for a work permit does not register you for tax and your registration with DHSS does not register you for tax.

There are a number of significant differences between the United Kingdom and the Isle of Man taxation system:

1. All taxpayers (with few exceptions) complete an income tax return form every year declaring their worldwide income
2. Penalties will be applied if return forms are not submitted within six months of issue. Return forms are ordinarily issued on 6 April for the preceding tax year
3. Tax allowances for jointly assessed married couples can be transferred during the tax year, and both spouses can be pursued for the joint tax liability
4. There are no additional tax allowances or credits for having children, however an additional personal allowance may be available if you are a single parent with a child under 19 years old and in full-time education
5. Tax relief is given on mortgage and loan interest, subject to certain conditions
6. Banks and building societies do not deduct tax at source, therefore all interest received must be declared on the income tax return form
7. There is no Capital Gains Tax and there is no Inheritance Tax

What are the rates of Income Tax in the Isle of Man?

The current rates of income tax can be found here

If I move to the Isle of Man are there any allowances to resident individuals?

If you move to the Isle of Man you will be entitled to claim the same personal allowances as any other Manx resident which will be apportioned depending on the date when you take up residence.

Are there any deductions of Income Tax at source on the Isle of Man?

For employment or if you are receiving a pension, a form of pay-as-you-earn known as Income Tax Instalment Payments (ITIP) is applied against your income. The weekly or monthly deduction is calculated by the employer using a code based upon the individuals allowable deductions and allowances.

What is the basis of assessment?

All income sources for individuals are charged on a current year basis. This being the income of the year of assessment. For example, the 2007/2008 year of assessment is based on the income of the year ending 5 April 2008.

Is there any Double Taxation Relief?

United Kingdom – apart from interest on certain British Government Securities which may be paid gross, individuals who have income from sources in the United Kingdom will be entitled to relief under the terms of the double taxation agreement. In addition, an individual may be entitled to make a claim to the Inland revenue for the following reliefs.

1. To have the United Kingdom personal allowance set-off against their United Kingdom source income.
2. To have further relief (Unilateral) for Manx Income charged on UK dividends and debenture interest.

Other Countries – The Island has only one double taxation arrangement with another country being a limited arrangement concluded with the USA in 1989

Under the arrangement the US Government agrees to exempt from tax gross income derived from the international operation of ships by Isle of Man Residents and corporations organised in the Isle of Man.

The exemption is granted on the basis that equivalent exemptions are granted by the Isle of Man to US residents and corporations organised in the US.

Although no further double taxation arrangements exist, relief is still given for any income which suffers foreign taxation. As with the United Kingdom, the relief is based on the lower of the overseas rate of tax or the Manx marginal rate of tax.