Introduction to the Isle of Man
Isle of Man - Location and History
The Isle of Man is located in the Irish Sea, between Britain and Ireland at 54 deg. N 4 deg. W. It has a land area of 572 sq. km. and a population of approximately 76,000 of which about half live in Douglas, the capital and financial centre. The main industries are financial services, agriculture and tourism and the Isle of man is also known for its Manx cats, which have no tails and for the annual motorcycling event known as the T.T. when races are held on the public roads. It is also used as a location for making films.
There is evidence of human activity from the fourth millennium B.C. although no trustworthy record exists of events before the sixth century. The Isle of Man was originally part of the Norwegian Kingdom of the Hebrides. It was ceded to Scotland in the 13th century and sovereignty passed between Scotland and England in the centuries that followed until the English Crown purchased it in 1765. It remains a Crown dependency and recognises the monarch as Head of State in the capacity of descendant of the ancient Lords of Mann. It is not part of the United Kingdom.
Isle of Man - GovernmentThe Isle of Man claims to have the world’s longest continuously sitting parliament, known as Tynwald and founded in A.D. 979. Tynwald is made up of a wholly elected chamber, the House of Keys, and the Legislative Council consisting of indirectly elected and ex-officio members. The Head of Government is the Chief Minister and the Lieutenant Governor represents the monarch on the Island. The structure of government is under review.
The British Government looks after foreign affairs and defence. The Isle of Man is associated with the European Union by virtue of protocol three attached to the U.K treaty of accession. There is a customs union with the United Kingdom.
Isle of Man - TaxationThe Isle of Man did not set out to be a tax haven. It has existed on low taxes for centuries and this eventually attracted outside business. Residents pay income tax at a maximum rate of 18%. There is no capital gains tax and no estate tax. Value added tax is at same rates as the United Kingdom although there are minor variations.
For companies, the Isle of Man operates a zero rate tax regime. Certain finance sector companies operating on the Island pay tax at a rate of 10%. There is a double taxation treaty with the United Kingdom.
The European Savings Tax Directive applies in the Isle of Man and individuals resident in a country covered by the Directive and receiving savings interest from an Isle of Man source have the option of paying a withholding tax, failing which the income is reported to the tax authorities in their home country.
Regulation of the Isle of Man Financial Services SectorThe Isle of Man Financial Supervision Commission is an independent statutory body, established in 1983 and responsible for the licensing and supervision of banks, building societies, investment business, collective investment schemes and companies which provide company and trust administration services. It is also responsible for the Companies Registry.
The Financial Supervision Commission is very strict in its approach to regulation and the money laundering laws. In view of this Chesterfield insists that where it provides company and trust management services from the Isle of Man it must be in full control of the entities concerned and their assets.
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