The Isle of Man is one of the best places to live in the World (I’m Manx so of course I’m biased!), however, it has now proved itself to be one of the greatest places to be in the World during the COVID-19 Global Pandemic. Not only were we able to shut our borders quickly (they remain closed except for residents who have to go into a 14-day isolation period when they return), we were the first place in the British Isles to return “back to normal”. While other countries around the world are living through various stages of lockdown, we are forever grateful that we have been able to resume our lives to a somewhat normal experience, reminding ourselves on a daily basis how lucky we are.
The question is, is it sustainable? Of course the answer is no, so we have to continue to attract individuals and businesses to the Isle of Man as a preferred jurisdiction. How? I hear you ask, you’ve just told us that borders remain closed to the general public. Fortunately, there are a few opportunities that will allow us to continue to attract people to the Isle of Man.
Incentives in place
The Isle of Man Government is keen to attract multi-nationals and Foreign Direct Investment and is continually working on various initiatives to encourage growth on the Island. The current, main focus initiatives are:
The Employee Relocation Incentive – if your business is interested in relocating an employee to the Isle of Man then the employee relocation incentive means that your business could receive up to 20% of your employee’s first year’s salary costs. This incentive provides a 20% grant of up to £10,000 towards the cost of a relocating employee’s first year net salary (minimum salary must be £25,000) paid one year post successful recruitment, and it can be used for existing or new roles within the organisation and includes back filled positions. The overall aim is to help local employers find additional, skilled workers (in certain sectors) and ensure they find continued growth and success in the Isle of Man whilst providing an ongoing contribution to the Island’s tax pool in the long term;
The National Insurance Holiday Scheme – those taking up employment in the Isle of Man could be up to £4,000 better off in their first year of work. The National Insurance Holiday Scheme came into effect in April 2019, and provides a refund on National Insurance contributions paid in the first 12 months of employment. The scheme is open to anyone in any role with a gross salary of £21,000 or more. To qualify, the employee must remain in employment for continuous period of at least 12 months;
The Special Treatment for Key Employees (“KEC”) – this ensures that an individual will only be liable to Manx income tax on Manx source income, so in essence, only the individual’s Manx source employment income, including benefits in kind and rent from arising from property in the Isle of Man is subject to Manx income tax. This means that an individual’s non-Isle of Man source income (and certain Isle of Man source income such as dividends and interest) is not subject to Manx income tax. Please note this lasts for a maximum of three years.
The Tax Cap election – the Isle of Man offers a Tax Cap for new and existing resident individuals of £200,000 per annum and was specifically introduced for those who have annual income such that their tax liability would otherwise exceed the Tax Cap. Individuals who are resident in the Isle of Man for income tax purposes are able to benefit from the Tax Cap. The maximum liability for a jointly assessed couple is £400,000. A valid Tax Cap will remain in force for five consecutive tax years. Alternatively, for those who are looking for flexibility without a five year cap election, the standard and higher personal tax rates are some of the lowest in Europe.
Relocation expenses (Benefit in Kind Exemption) - the Income Tax Division on the Island will not tax relocation payments that are made within certain limits for certain expenses. The intention of the relocation exemption is to assist employers where the employee relocates to the Island to undertake full time employment and residence on the Isle of Man. The exemption does not apply where an individual comes to the Isle of Man for the purposes of setting up a business, as the individual has not relocated for the purpose of taking up employment.
How does it work in the current climate?
These incentives still remain in place, even if you are not a resident in the Isle of Man. Subject to adhering to certain conditions, The Isle of Man Government will allow you to come over to the Isle of Man if you are:
- Buying residential property and have plans to live here; or
- You are relocating your business to the Island; or
- You have a secured a job (and have been given a work permit).
The Island is keen to continue to grow, even if we are battling through a global pandemic. Please note that if you are interested in buying a property, this will either need to be done by a virtual viewing or by strict appointment only which certain criteria need to be met.
If you would like more information on how we can help you relocate to the Isle of Man, then please get in touch with us at firstname.lastname@example.org and we will be more than happy to help you and if required, we will be able to put you in touch with the right people at Locate Isle of Man.
Peregrine Corporate Services Limited is licensed by the Isle of Man Financial Services Authority.