Isle of Man tax question
Discussion
Please excuse any ignorance on my part if the question seems stupid or obvious, but I was wondering
When you buy and sell shares at a profit, you pay capital gains tax.
I understand there is no CGT on the Isle of Man - and income tax is also relatively low.
How can a British Citizen take advantage of this? If one moves to the Isle of Mann and deals shares from there, are you automatically not liable to pay tax? Does the same apply for Income tax?
When you buy and sell shares at a profit, you pay capital gains tax.
I understand there is no CGT on the Isle of Man - and income tax is also relatively low.
How can a British Citizen take advantage of this? If one moves to the Isle of Mann and deals shares from there, are you automatically not liable to pay tax? Does the same apply for Income tax?
If you are lucky enough to be tax resident on the Isle of Man, then you can avail of the Isle of Nan tax legislation and rules. However, the Isle of Man is not part of the United Kingdom so UK citizens have no automatic right to live there or avail of its tax residency status.
There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
Vixpy1 said:
I think it needs to be your primary residence, so you need to spend more than 6 months of the year there.
Its a lovely place, but the people are .. well.. some of them are odd
Six months? I thought the rule was that you were only allowed 30 days out of IOM to visit the U.K. Maybe you mean six months' including trips anywhere else.?Its a lovely place, but the people are .. well.. some of them are odd
LDN said:
Vixpy1 said:
I think it needs to be your primary residence, so you need to spend more than 6 months of the year there.
Its a lovely place, but the people are .. well.. some of them are odd
Six months? I thought the rule was that you were only allowed 30 days out of IOM to visit the U.K. Maybe you mean six months' including trips anywhere else.?Its a lovely place, but the people are .. well.. some of them are odd
Residence & domicile are different things with regard to tax.
Not sure on the IOM, but if its anything like Guernsey, then there is no Capital gains tax of any sort. Or VAT. Or IHT.
Interesting, thanks for the replies!
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
Typhon said:
Interesting, thanks for the replies!
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
It doesn't matter where you buy shares if you are a UK taxpayer, you pay tax on your global income or gains. It is obviously possible to leave the UK tax system but it's hard/impossible to take a holiday abroad for a year or two, realise your gains and come home. One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
Typhon said:
Interesting, thanks for the replies!
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
If you become tax resident outside the UK, then you will become subject to the tax laws of that country rather than the UK.One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
However, in order to become tax resident in another country and lose your UK tax residency, you really need to be outside the UK in that country for one complete UK tax year i.e. from 6 April to following 5 April. You are allowed return to the UK for short visits but you cannot in total stay in the UK more than 90 days.
For certain types of taxes, you might find that losing your UK tax residency isn't enough - you might have to lose your UK domicile, which is a much, much harder thing to do. The main UK tax which can be affected by domicile status is Inheritance Tax.
If you bought assets when you were a UK tax resident, but sold them during a period when you were genuinely a non-UK tax resident (say, working in a permanent position overseas), you MIGHT be able to escape UK CGT for that particular sale. However, it would be a rather drastic thing to do just to avoid CGT.
Edited by Eric Mc on Tuesday 25th May 19:42
If you are a UK national/domicile and have been long term resident then you would need to be non resident in the UK for five complete UK tax years and sell the assets during a full year of non UK tax residence to escape CGT.
Some countries with which we have a double tax treaty used to be very helpful (Belgium for example) and if you were resident there and non resident in the UK then you would not be liable to UK CGT. You didn't have to worry about the five year period mentioned above. However the UK Government closed this and now they can still apply their five year rule as the treaty was changed. I believe that they have applied this to most/all treaties that used to have a similar clause.
Some countries with which we have a double tax treaty used to be very helpful (Belgium for example) and if you were resident there and non resident in the UK then you would not be liable to UK CGT. You didn't have to worry about the five year period mentioned above. However the UK Government closed this and now they can still apply their five year rule as the treaty was changed. I believe that they have applied this to most/all treaties that used to have a similar clause.
Edited by LC23 on Tuesday 25th May 20:28
Beardy10 said:
Typhon said:
Interesting, thanks for the replies!
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
It doesn't matter where you buy shares if you are a UK taxpayer, you pay tax on your global income or gains. It is obviously possible to leave the UK tax system but it's hard/impossible to take a holiday abroad for a year or two, realise your gains and come home. One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
LC23 said:
Beardy10 said:
Typhon said:
Interesting, thanks for the replies!
One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
It doesn't matter where you buy shares if you are a UK taxpayer, you pay tax on your global income or gains. It is obviously possible to leave the UK tax system but it's hard/impossible to take a holiday abroad for a year or two, realise your gains and come home. One more, which is somewhat related.
If I buy shares while I am in the UK, can I then sell them elsewhere if I am (or have become) a citizen elsewhere with different CGT laws - like Isle of Man for example, or another country? What would be the best way of doing that? I.e would I just go on III or is there a better way of buying shares for the long term in such a situation?
Beardy10 said:
It doesn't matter where you buy shares if you are a UK taxpayer, you pay tax on your global income or gains. It is obviously possible to leave the UK tax system but it's hard/impossible to take a holiday abroad for a year or two, realise your gains and come home.
The ultimate plan is not to come home but eventaully emigrate, that's why I asked.Unless ofcourse, the UK becomes a desirable place to live again in the near future
If you leave you really have to turn your back on the UK from day one. If you have no friends, and an absolute huge amount of CGT to be saved then maybe it makes sense. Read this:
http://www.guardian.co.uk/business/2010/feb/05/emi...
Perhaps an extreme example, but the UK really will try to do everything to try and catch you out (a bit like insurance companies when they dont want to pay out!), so it's best that once you're there - stay put for a few years and don't visit the UK.
Also note the island is very small. To get an idea, draw an outline of the island on a map where to scale, where you live now and imagine beyond that wall you can no longer go there. You can visit Ireland freely of course. Well, I say freely but during the winter months theres only a ferry once a month.
There are other options open to you if it's just CGT...
http://www.50connect.co.uk/finance/tax/capital_gai...
It would be a pity if you moved there for 5 years only for things to improve in the UK: http://news.bbc.co.uk/1/hi/8698437.stm
All in all, moving to IOM is not a decision to be taken lightly. Most of the wealth on the island is derived not from residents but people with offshore accounts and companies - often from beyond the UK (the US in particular it seems). Mann's reputation of being a tax haven for "UK exiles" is slightly over played - otherwise it's population would be quite a bit more than 80,000!
http://www.guardian.co.uk/business/2010/feb/05/emi...
Perhaps an extreme example, but the UK really will try to do everything to try and catch you out (a bit like insurance companies when they dont want to pay out!), so it's best that once you're there - stay put for a few years and don't visit the UK.
Also note the island is very small. To get an idea, draw an outline of the island on a map where to scale, where you live now and imagine beyond that wall you can no longer go there. You can visit Ireland freely of course. Well, I say freely but during the winter months theres only a ferry once a month.
There are other options open to you if it's just CGT...
http://www.50connect.co.uk/finance/tax/capital_gai...
It would be a pity if you moved there for 5 years only for things to improve in the UK: http://news.bbc.co.uk/1/hi/8698437.stm
All in all, moving to IOM is not a decision to be taken lightly. Most of the wealth on the island is derived not from residents but people with offshore accounts and companies - often from beyond the UK (the US in particular it seems). Mann's reputation of being a tax haven for "UK exiles" is slightly over played - otherwise it's population would be quite a bit more than 80,000!
Eric Mc said:
If you are lucky enough to be tax resident on the Isle of Man, then you can avail of the Isle of Nan tax legislation and rules. However, the Isle of Man is not part of the United Kingdom so UK citizens have no automatic right to live there or avail of its tax residency status.
There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
Actually, as a UK citizen you do have the right to live there (and presumably pay their taxes!) but not automatic right to a work permit.There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
smartie said:
Eric Mc said:
If you are lucky enough to be tax resident on the Isle of Man, then you can avail of the Isle of Nan tax legislation and rules. However, the Isle of Man is not part of the United Kingdom so UK citizens have no automatic right to live there or avail of its tax residency status.
There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
Actually, as a UK citizen you do have the right to live there (and presumably pay their taxes!) but not automatic right to a work permit.There are some complicated and convulted schemes whereby UK tax residents set up limited companies and trusts in the Isle of Man in an attemnpt to shelter their wealth and Capital Gains in an offshore tax haven. However, most of these schemes are only suitable for those who can afford them and some of the schemes are close to the wind from a UK tax law point of view.
I suppose yes, although I think work permits are quite achievable for skilled/professional people and you can earn the right to remain after, I think, 5 years.
Is the IOM a bit odd in so much as it's part of the UK but the Queen is still the head of state and it has many ties with the UK. Also, its not in the EU!!
In fact, its almost PH island when you consider the facts.
Is the IOM a bit odd in so much as it's part of the UK but the Queen is still the head of state and it has many ties with the UK. Also, its not in the EU!!
In fact, its almost PH island when you consider the facts.
I can almost hear the strains of Tight Fit.auditt said:
Interesting question; Whats the story with being a british citizen but having an irish domicile?
If you are non UK domicile then you can be taxed on the remittance basis for non UK source income. If you are resident and ordinarily resident then basically investment income/gains and income relating to an employment contract where the employer is outside the UK and the work is performed wholly outside the UK. However, if the non remitted overseas income is more then £2000 and you have been resident for 7 out of 9 tax years then there is a nice £30,000 charge to pay before you can access the remittance basis.HMRC6 is your "friend".
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