Isle of Man: Personal Taxation
This page was last updated on 25 February 2020.
There is no general capital gains tax, turnover tax, capital transfer tax or stamp duty on the Isle of Man. Apart from VAT, the only significant tax is income tax which is levied on 'persons', i.e. both individuals and corporations (companies). Social security contributions are also payable. For the remainder of 2020, the Isle of Man will form part of the EU VAT area and apply the same rate as the UK.
The following describes some noteworthy tax changes announced in recent years.
The 2006 Budget introduced a cap on personal income tax at a maximum level of GBP100,000 per annum (raised to GBP115,000 as of 6 April 2010), irrespective of earnings. This was done with an eye to attracting high-net-worth individuals and active entrepreneurs to the island with the drive to further stimulate the Isle of Man's burgeoning economy.
In 2007, the Income Tax Division of the Manx Treasury announced the launch of convenient, easy to use and secure online services for individual taxpayers. The individual tax service will allow people to review their previously submitted tax returns and their tax assessments. Payment enquiries can also be made, allowing taxpayers to both view their outstanding tax balance, and make payments online by debit or credit card.
The Treasury said that these online enquiry and payment services will help people keep up to date with their tax affairs, and assist them when they are preparing their tax returns. The Income Tax Division will introduce an online tax return submission service for individual taxpayers in the future.
The 2008 budget provided for an additional income tax allowance of GBP2,000 for all over-65s, taking another 1,650 pensioners out of the tax net. In 2008/09 half the island’s retired population of the island will pay no income tax. The age allowance for 2010/11 is set at GBP2,020.
The 2009 budget increased the upper income point of the personal allowance credit (PAC) for resident individuals to GBP9,200 from GBP8,850 (GBP9,300 in 2011). In 2010, the amount of the credit was increased by 18% to GBP650 in respect of payments made for the tax year commencing 6 April 2009 which are paid after 6 April 2010. This was increased to GBP700 for the tax year commencing 6 April 2010 which are paid after 6 April 2011. The PAC is paid to resident individuals who do not fully utilise their single or married couple's personal allowance.
Although the rise of 1% in national insurance contributions in the UK from April, 2011 was not mirrored in the Manx budget, tax deductibility of Class 4 contributions was withdrawn as from 6 April 2011, a move carried out in the UK in 1996.
In the 2020 Budget, £5 million was allocated to reduce carbon emissions and a further £5 million to protect the environment. This is part of the government’s strategy to reduce carbon emissions to zero by 2050.