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Moving to the Island - new residents

Residence in the Isle of Man

The Income Tax Division has published a Practice Note (PN 144-07) regarding residence in the Isle of Man.

If you have any queries regarding your residence status please contact us on +44 1624 685400.

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 and your registration with Department of Social Care 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 6 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 on the Rates and Allowances page

If an individual makes a valid election for the Tax Cap their income tax liability will be capped at the same maximum amount for each year during the 5 year election period.  Further details can be found in Practice Note 184/14.  Any changes to the amount of the Tax Cap are announced in the budget each year, see PN 195/17.

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 an occupational 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 2015/2016 year of assessment is based on the income of the year ending 5 April 2016.

Is there any Double Taxation Relief?

The Isle of Man has a number of taxation agreements with various countries in place. Please refer to the section on International Agreements for further information.

Where a double taxation agreement does not exist with a country, relief may still given for any income which suffers foreign taxation and proof of the tax suffered is submitted. The relief is based on the lower of the overseas rate of tax or the Isle of Man marginal rate of tax.

How long am I allowed on the Island before I become resident?

This 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 6 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.

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?

When 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.

How long do I need to be resident not to qualify for inheritance tax?

As there is no inheritance tax on the Isle of Man, you should ask the tax authority where the asset/property is held.

What happens if I’m resident elsewhere and pay tax in different jurisdictions?

It 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.

I have bought a holiday home on the Island; what do I need to do?

You should contact the Income Tax Division as soon as possible for further information.

Income Tax Division

Government Offices

Bucks Road

Douglas

Isle of Man

IM1 3TX

Telephone:+44 1624 685400

I am starting a job soon; how do I get a code?

Tax 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.

I am starting self-employment; how do I register? How will I pay Income Tax and National Insurance?

You 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 + 44 1624 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.

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