Making payments to non-residents

Any person making payments (for instance rent or interest payments) to another person who is resident outside the Isle of Man, will be required by the Income Tax Division to deduct the prescribed higher rate of tax from the payment. A common example of this is a business managing a property on behalf of the property owner where the business managing the property will receive rental income on behalf of the owner.

When the Division first becomes aware that a person is making payments to a non-resident, the following will be issued:

• N15 – Notice to Deduct Tax. This is an instruction to deduct tax from all future payments
  
  
• N13 – Certificate of Non-Resident Tax Deducted. This is for the payer to record the gross payment, i.e. rent, the amount of tax deducted and the total amount paid. This is sent to the recipient along with the balance of funds, as evidence of tax deducted
  
  
• N20 - Estate Agent - New Client Commencing - Used by Estate Agents to register new properties being rented by Non-Resident landlords. This should be sent to the Income Tax Division
  
  
• N35 – Remittance Card. This is sent to the tax office, along with the tax payment, within 14 days of payment being made
  
  
• N37 - Annual return. This is to be completed at the tax year end detailing all payments made in the year
  
  
• R221 - This form enables individuals who are resident in a country with which the Isle of Man has a relevant taxation agreement with to apply to receive their Isle of Man source pension without the deduction of Isle of Man income tax or to claim a repayment of such tax previously deducted. A relevant agreement is one which provides for relief from Isle of Man income tax on pension income arising in the Isle of Man