Moving to the Isle of Man

[nodric]

The main thing to watch with the 0% corporation tax rate over here, is that for this to apply you have to pay out 55% or more of profits as dividends. If you need any more advice feel free to drop me a PM if you like.

You make it sound wonderful, well apart from the wet stuff

What are the personal rates on income tax/NI? If you have to dump 55% of the profits as dividends, I wonder if you either need a harem of wives to share the dividends amongst, or if the personal rates are attractive enough to take them all yourself?

Does the IOM have tax treaties with other offshore tax havens by chance? Will they allow an offshore MyCo to be a shareholder in the IOM MyCo? In simple terms pay your 55% to the BVI, Mauritius or the like, without the IOM Hector imposing any withholding taxes?

Just a thought

[Vallah]

Top rate of personal tax is 20% Nodric, which kicks in after about £40K, which is roughly £19K tax free (if you have a non working spouse) and £21K at 10%.

Not sure about having BVI shareholders, interesting idea though!

[Winger300]

Thanks for the further info. I just read the overview on Attribution Regime for Individuals (ARI), but I'm still a little unclear....

Lets say I make 60K in a year, My wife isn't working so I can take around 21k Tax free, How do I maximise my take home pay? and what deductions (N.I, Income tax, CT etc) will I have to make?

e.g. If I take 20k as salary, and pay the remaining 40k in dividends to myself, does that exclude me from ARI?

Does it make any sense to split dividends between myself and my wife?

[Vallah]

Thanks for the further info. I just read the overview on Attribution Regime for Individuals (ARI), but I'm still a little unclear....

Lets say I make 60K in a year, My wife isn't working so I can take around 21k Tax free, How do I maximise my take home pay? and what deductions (N.I, Income tax, CT etc) will I have to make?

e.g. If I take 20k as salary, and pay the remaining 40k in dividends to myself, does that exclude me from ARI?

Does it make any sense to split dividends between myself and my wife?

Your scenario would exclude you from ARI, as you'd be paying out all available profit as dividends. By my rough reckonong, you'd have £20K tax free, then you'd pay 10% on the next 20K, then 20% on everything over that. I don't think it'd make any difference giving some of the dividend to your wife, as the IOM assess you jointly (which is how you get to use her personal allowance). There'd be no CT to pay, and I think you'd only pay NI (ees and ers) on the first £20K, subject to allowances.

Also bear in mind that if you buy a property over here, your mortgage interest is an allowable expense on your personal inccome tax return.

[Winger300]

So do you have to pay income tax on dividends received at the standard rates and thresholds?