The Isle of Man government has confirmed in its 2006 budget that it will cap personal income tax at ...
The Isle of Man government has confirmed in its 2006 budget that it will cap personal income tax at £100,000 to attract high net worth (HNW) individuals to the island.
Malcolm Couch, assessor of income tax on the island, said although personal allowances had been increased in the Isle of Man, the tax rates would remain at the standard rate of 10% and the higher rate of 18%.
For example, individuals that live on the island have had their personal allowance increased from £8,500 to £8,670. The first £10,500 will be taxed at 10% instead of £10,300, while the rest will still be taxed at 18% with a cap of £100,000.
As previously reported in International Investment (February 2006, p3) Hon Allan Bell, treasury minister in the Isle of Man government, said: "In attracting HNW individuals to the island we hope to encourage them to use our banking facilities and other financial services to manage their assets."
The Isle of Man government also announced the start of a consultation, which will look at the benefits of capping corporation tax.
Presently, on the Isle of Man banking business profits are taxed at 10%, with non-banking business profits taxed at 0%.
According to Couch, this would be good news for the banking industry because banks remain the islands main source of income tax.
He added: "It is in our interests to help the banks become as profitable as possible."
Tax rates remain the same on the Isle of Man
Personal income tax capped at £100,000
Consultation on capping corporate tax
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