With a tax-friendly system and higher pay in some areas than in the UK You are more likely to earn a higher “final take home pay’ and live a luxurious life at the same time.
If you’re thinking of moving from the UK to Isle of Man, then you’re likely considering how your relocation could benefit your career, quality of life and your financial situation. With a tax-friendly system as well as higher salaries in certain sectors than in the UK, you are likely to enjoy a better “final take-home pay” and live an enjoyable lifestyle while at it.
We offer advice and advice to assist you in making your move as effortless as possible…
1. You’ve left , and are now arriving to tax reporting
When you leave a country that you have not visited, you need to comply with local rules and tell the tax authorities that you’ve gone and typically settle your tax matters there. On arrival on the Island both you and your spouse must complete an application for a Manx income tax form.
The information is basic about you, your spouse, the place you live, or propose to live, and your expected income , as well as other details that are relevant. The earlier you fill out this form, the quicker your Income Tax Division will issue you with a tax reference number.
It is also possible to obtain a national insurance number once in Isle of Man employment. This could require a brief interview with the Government. Once you are eligible for tax exemption the income tax return will be delivered to the address you have registered to complete for the relevant tax year.
Note: The tax year run from 6 April to 5 April the year after.
2. Application for employment
Your employer will likely be able to obtain a work permit to enable you to work. Anyone who is employed on the island requires the work permit, in the event that they are not an Isle of Man worker. If you are self-employed or creating a company, you may apply for a work permit on your own. If you fall into certain types of jobs, (eg people working in IT and the e-business industry) you may fall into an exemption for work permits. Additionally, if you are a newcomer to the Island and are not a resident, you do not require a work permit in order to work, if in doing so have met the requirements under the laws governing immigration on the island.
Partners (Civil, Spouse or co-habiting partners) of the Isle of Man worker are qualified for an automatic one-year work permit, even in the event that they have not yet found work. You can apply for this yourself by completing the online application. You must submit you with your spouse’s Working Permit Reference, your personal information as well as employment information (if relevant) as well as evidence of your relationship with IOM Worker IOM Worker (marriage/civil partner certificate, or the Cohabiting Partner Additional Information form). The cost for This permit amounts to PS60 and can be renewed annually.
Once you have a work permit and you’re registered for income tax Your employer will then be able to register you as an employee and you will be provided with a tax ID for the tax division that you pay. It will also indicate any deductions to which you are entitled to as well as personal allowances. It will also be relevant when calculating the tax due on your earnings.
3. Opening an account at a bank
The island has a range of banks that are well-known and opening an account can be easy if you’re prepared. You’ll have to fill out various forms and provide the original identity documents, like a passport. Should you be able to have the relevant documentation to hand it should be quick. You may also be required proof of where the money is coming from, so it’s a good idea to make sure you are prepared with answers to such inquiries. A majority of banks won’t even start a bank account unless you have a residence address on the island.
Additionally, most professionals and institutions will have to be able to identify you before they can address you, which is why it’s best to have the basic paperwork whenever you meet with investment advisors attorneys, accountants, lawyers or other professionals.
4. Minimising non-IOM taxes
Once you are an Isle of Man resident for tax purpose, you will have to pay Manx tax on your income from anywhere in the world except if you qualify for Key Employee Concession. Employers can request this concession if you are a key employee. If you are a key employee for 3 tax seasons, you will only be required to pay Isle of Man income tax on your Isle of Man employment income and not pay any other taxes. Your employer may apply for this on behalf of you, it is a good incentive. The consequence of a global basis for taxation is that you are required to report annually all your income (even even if you’ve paid tax on it in a different country). In the event of tax that is not Isle of man paid, you’ll get credit for a part of the tax you have paid towards you Isle of Man liability.
Being an Isle of Man tax resident is not a bar to also being treated as tax-residents in another country as well (depending on the tax laws in the country) also from being subject to tax in other countries because of your residency status in that country (or the reason for your earnings (which could be derived from another country, for instance, non-Isle man rental earnings).
It is important to note that the Isle of Man does not impose any wealth or capital taxes: you can, however, be subject to capital taxes in other nations based on the laws local to those countries and where assets are situated.
5. Buying or renting?
You may choose to buy or rent a house in the Island or your employer could lease it for you. If your employer leases a property for you, you will be taxed on the advantages of this property being provided to you as part of your salary. If you decide to lease it, you’ll need to sign a lease agreement that usually lasts for 12 months or more although shorter term leases are available: an estate agent will be able to assist you.
Buying a house or flat may not be as easy, especially if you need to get a mortgage. It can take a long time, but also if you do not have a strong credit history, banks may not be willing to lend to you. It is vital to build up your credit score so that when banks begin to deal with your credit and begins to conduct its scoring process, you can satisfy their criteria. A credit history that is used to establish the credit score is an indication of your responsible paying off obligations. To establish a credit history, it is essential that you track and keep your balances on credit cards under control or eliminate them. You must also pay the bills and debts as they’re due, and do not engage in risky transactions.
6. Investing your money
Isle of Man Isle of Man has a lower tax rate than the rest of the UK and with the absence of capital taxes, you are likely to have more disposable income after you have paid tax on Isle of Man income tax. This could give you more money to invest in stocks and shares. The Isle of Man has a fairly simple tax system and the laws are not extensive. With no capital taxes you do not have to consider income, which means there is a lot more opportunity to invest than other countries , as far as taxation is related in general terms. However, due to its tax system, it is possible that investment returns are treated as income. You need to inquire with your tax advisor, on how return on investment is taxed.