Moving to the Isle of Man

[Winger300]

I'm currently considering moving to the Isle of Man for a couple of years, No IR35, 0% Corporation tax, Married tax allowance of 21k (Wife is not working), seems too good. All my work is from home, so I don't know why I didn't do this sooner.

I'm just wondering what is the best way to go about this. I currently have a UK Ltd, working fully inside IR35.

Should I wind-up the UK Ltd and form a new company on the IOM, or is it possible to transfer the company over?

It looks like I can end up only paying National insurance, take salary upto the tax threshold, and dividends for the remainder. Is this the most efficient arrangement?

Any advice is appreciated.

[nodric]

I'm currently considering moving to the Isle of Man for a couple of years, No IR35, 0% Corporation tax, Married tax allowance of 21k (Wife is not working), seems too good. All my work is from home, so I don't know why I didn't do this sooner.

I'm just wondering what is the best way to go about this. I currently have a UK Ltd, working fully inside IR35.

Should I wind-up the UK Ltd and form a new company on the IOM, or is it possible to transfer the company over?

It looks like I can end up only paying National insurance, take salary upto the tax threshold, and dividends for the remainder. Is this the most efficient arrangement?

Any advice is appreciated.

Warnings:

IOM is non OECD compliant.

Lots of pimps won’t touch IOM, so you may have a hard time getting work without doing a lot of leg work to convince the pimp you actually live there, or are tax resident there.

Filetravel (well known ManCo in IOM) are relocating to Ireland due to these problems.

Belgium (just used as example) has started statutory reporting for all agencies paying more than 100K per contract to the IOM annually. i.e. They are watching.

A lot of the tax benefits in the IOM are only applicable if you are a non resident director of an IOM company, so check the facts on Dividends and Corp tax.

Question for those that know more than me: Are there any residency limitations similar to those Jersey impose? i.e. They only want the rich unless you were born there, or have a blood line still there? Can't buy or rent property etc

So do lots of research before hopping over the Irish sea.

P.S. It rains a lot there too, but fun if you like Thomas the Tank Engine

[Jet Setter]

Warnings:

IOM is non OECD compliant.

Lots of pimps won’t touch IOM, so you may have a hard time getting work without doing a lot of leg work to convince the pimp you actually live there, or are tax resident there.

Filetravel (well known ManCo in IOM) are relocating to Ireland due to these problems.

Belgium (just used as example) has started statutory reporting for all agencies paying more than 100K per contract to the IOM annually. i.e. They are watching.

A lot of the tax benefits in the IOM are only applicable if you are a non resident director of an IOM company, so check the facts on Dividends and Corp tax.

Question for those that know more than me: Are there any residency limitations similar to those Jersey impose? i.e. They only want the rich unless you were born there, or have a blood line still there? Can't buy or rent property etc

So do lots of research before hopping over the Irish sea.

P.S. It rains a lot there too, but fun if you like Thomas the Tank Engine

I know a couple of locals there and it's the opposite. They badly want skilled people over there and provide all sorts of housing assistance for people wanting to buy, provided that you stay there for a number of years. They suffer from quite the drain of skills there and having visited a couple of times, I can see why people are keen to escape!

[Brussels Slumdog]

Not Quite sure that you would escape UK taxation

Yes you can become an IOM resident but as as an IOM tax resident you would pay 20% income tax
plus social security.

You could bill the company through a swiss management company but as Nodric says your Ltd company may be a problem

You would need Fiscal Advice as to whether you would be subject to UK or IOM taxes as your end client is not an IOM company as per C below

Here is an extract from the IOM UK double taxation agreement

"An individual who is a resident of the Island shall be exempt from United Kingdom tax on profits or remuneration in respect of personal (including professional) services performed within the United Kingdom in any year of assessment if
a. he is present within the United Kingdom for a period or periods not exceeding in the aggregate 183 days during that year, and
b. the services are performed for or on behalf of a person resident in the Island, and
c. the profits or remuneration are subject to Manx tax."

Have You considered Malta or Cyprus as they are both warmer so your non working wife could spend the day on the beach

[moorfield]

WHS before. Pimps will be reluctant to deal with you.

And any tax saving you make will most likely be lost shelling out on a sh1tty weekly commute if you do end up working back in the UK, so you'd have to be doing it for the lifestyle or unless you are marrying a minx (did you see what I did there?).

[Winger300]

I'm working on an indefinite long-term contract directly with a client in Sweden. So i'm not too concerned about agencies.

As far as I understand it, I can earn 21K and pay no income tax, N.I on that 21k shouldn't be much, then take the rest as dividends. I'm not sure what tax there is to pay on receipt of dividends, but I will be an IOM resident, and the corporation tax would be 0%.

Is this correct?

What about my other question with regards to the UK Ltd company? Should I just start up a new Ltd over on the IOM? Can I close down the UK Ltd, but keep it dormant in case we move back to the UK?

[nodric]

I'm working on an indefinite long-term contract directly with a client in Sweden. So i'm not too concerned about agencies.

As far as I understand it, I can earn 21K and pay no income tax, N.I on that 21k shouldn't be much, then take the rest as dividends. I'm not sure what tax there is to pay on receipt of dividends, but I will be an IOM resident, and the corporation tax would be 0%.

Is this correct?

What about my other question with regards to the UK Ltd company? Should I just start up a new Ltd over on the IOM? Can I close down the UK Ltd, but keep it dormant in case we move back to the UK?

If you are spending more than 183 days a year outside the UK, then after 3 years, usually less if you apply, Hector will normally consider you no longer domiciled or resident for tax. <---- This is what happened to me.

Have you become tax resident in Sweden, technically, if not actually. i.e. Have you been in their land enough to have them judge you as such? Even if your CEI remains in the UK (home/wife/kids etc), you are still liable for personal income tax and SS in Sweden if they judge you tax resident. Your MyCo should be safe if the wife is a director, or you could be judged as having relocated its CEI to Sweden.

If you can get Hector to accept you aren’t in the UK enough, and/or are permanently working aboard, and you can avoid the Swedes grabbing you as a tax resident, then you could simply use a ManCo to wash the funds offshore.

Of course if you are trading through your UK MyCo and billing the Swedes directly, or through a UK agency, then not going to be easy to dodge Self Assessment.

Have a read of the thread on a Contractor Owned ManCo, last few pages of posts. You could follow the route of setting up your own Cypriot IBC, and working through that. Corp tax is 10%, and no withholding on dividends. UK tax on dividends is 10% at basic rate. You can even set up an IOM company (non resident) which could also be a shareholder of the Cypriot IBC.

As for your UK MyCo. Make it dormant, or shut it down. Easier to start a new company in the IOM than try and relocate your existing one, with all that entails, and the trails it leaves behind for Hector to follow!

[Winger300]

Well, right now I'm living in the UK, and working remotely. I visit Sweden for 2-3 days in a year! I'll be working with the same arrangement in the Isle of Man, but I can be anywhere within +/- 2 hours of Sweden time.

I read on the HMRC website that if you move out of the UK with the intention of working abroad for at least the whole tax year, then you are exempt from UK tax from the day you leave. If you come back too soon then that's another matter of course.

If I make my UK Ltd dormant, what do I need to do year-year? do I still need an accountant to file returns, or is it something so simple I can do myself, or just let an accountant on the Isle of Man take care of it?

Thanks for the advice

[ShandyDrinker]

I'm currently considering moving to the Isle of Man for a couple of years, No IR35, 0% Corporation tax, Married tax allowance of 21k (Wife is not working), seems too good. All my work is from home, so I don't know why I didn't do this sooner.

I'm just wondering what is the best way to go about this. I currently have a UK Ltd, working fully inside IR35.

Should I wind-up the UK Ltd and form a new company on the IOM, or is it possible to transfer the company over?

It looks like I can end up only paying National insurance, take salary upto the tax threshold, and dividends for the remainder. Is this the most efficient arrangement?

Any advice is appreciated.

You can easily set up a new company in the Isle of Man but I found the fees a lot more exorbitant (thanks to the Financial Supervision Commission) than being based in the UK (via Companies House). I don't believe you'd be able to transfer the company over but someone might know of a way.

Although the headline rate of Corporation Tax of 0% sounds great, you need to check up on the Distributable Profit Charge to determine how much tax you are really likely to have to pay.

Although I am sure you are aware of this already, the Isle of Man is not a cheap place to live in terms of the cost of housing, travel to/from the island and everyday necessities such as gas/electric/food/etc.

It can be a fantastic place to live but I would seriously do your homework before you commit to moving there.

[Vallah]

I moved over here (to the IOM) a few years ago, and it's a fantastic place to live. The cost of living is a little bit higher than the UK for things like petrol and food etc, but this is more than offset by the low tax, plus the old style rates (housing plus water combined) is a fraction of what you'll pay in the UK on council tax and water rates. Some of the plus points I find are great schools, hardly any crime, little traffic, and despite what you might hear, a great social life as there are many professionals who have moved over who would be in the same position as you. I can't deny it rains a fair bit, but when it is nice, you're never more than a few minutes from some great ebaches.

Setting up a company is pretty easy with the FSC, and if you want to keep your UK company, just file a dormant company set of accounts, which I think is just a balance sheet with a note saying that the company didn't trade. Simple.

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.