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Isle of Man: Domestic Corporate Taxion

Taxation of Trusts

This page was last updated on 24 February 2020.

In the normal trust situation, i.e. with settlor, life tenants and beneficiaries all being non-resident, full exemption from Isle of Man taxation is given to foreign income and local bank interest, by concession.

A Manx resident who receives income from a trust, whether Manx or foreign, will be taxed on it. However, if income is accumulated in a Manx trust with Manx beneficiaries, the trustee(s) will be assessed on the income.

In October 2009, the Isle of Man Treasury released additional guidance on the taxation of trusts in a practice note which set out the assessor's view of when trustees and beneficiaries of trusts may be subject to Manx income tax.

The practice note provides guidance on filing requirements, the resident exclusion clause, changes in trustees and the trustees’ tax positions, trustee management expenses, income distributions to non-resident beneficiaries and purpose trusts. The practice note also stipulated that the tax rate on trusts for the financial year 2009-10 was 18%.

 

 

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