The Isle of Man Government’s policy is to grow our population by 15,000 from the current 85,000(ish) in 2022 towards 100,000 by 2037.
There are three very good reasons to move to the Isle of Man – quality of life, quality of life and quality of life. See if this article persuades you!
In conjunction with this, as is well known, – we also enjoy a very favourable tax regime.
So far, the Government policy to increase the population seems to be working, albeit with a little help from Rachel Reeves, as in recent months, we have helped increasing numbers of entrepreneurs to move to our Island.
This article details a helpful and surprisingly generous relocation incentive offered by our Government which might be relevant to you if you are an entrepreneur moving to our lovely island to set up a new business.
Isle of Man Relocation Tax Relief
The Isle of Man Income Tax Division grants tax relief for employee relocation expenses under specific conditions. These provisions can save you money and can apply to you if you are an entrepreneur setting up a new Isle of Man company of which you will be an employee.
Key Features of the Tax Relief:
Exemption Threshold:
Relocation expenses covered by employers are exempt from income tax up to a total value of £20,000. Essentially the costs can be covered by the company and you will not incur a personal ‘benefit in kind’ income tax charge.
Eligible Expenses:
(a) ‘Reasonable relocation expenses’ – which includes:-
- the direct costs of selling the person’s current home;
- the legal costs of acquiring a new home in the Isle of Man.
- removal expenses; and
- indirect costs relating to the move, such as replacing carpets and curtains in the new home.
(b) Travel expenses.
- The exemption also applies to travel costs met by the employer for travel between the person’s previous home and the Isle of Man in the first 6 months of employment.
(c) Accommodation expenses.
- The exemption will also apply to costs met by the employer for the provision of temporary accommodation for the person in the first 3 months of employment.
Conditions:
- Expenses must be incurred directly as part of the relocation process.
Timeframe:
- The relief is available for relocation expenses incurred within a ‘reasonable’ time frame, typically tied to the commencement of the new role.
Full records of all payments made must be maintained by the employer and must be available for inspection under the ITIP Regulations.
For more detailed information, refer to Practice Note PN 193/16.
It’s important to note that this is a concession, therefore the success of an application is ultimately determined by the Income Tax Division.
Conclusion
The Isle of Man’s relocation tax relief scheme provides a valuable financial incentive for entrepreneurs and professionals looking to move to the island. It can help reduce relocation costs, making it easier to settle into your new life and business.
Contact Martin or Harrison Katz for more information.
