The Isle of Man is used by individuals and companies across the world as a financial centre. With its policy of low taxation, and it banks renowned for customer privacy, the Isle of Man has long been used as a tax haven by individuals and businesses. While it is increasingly difficult to avoid taxes through offshore banking, it is still possible on the Isle of Man. Here's how.
Research in depth the Isle of Man as a financial jurisdiction before considering opening an account.
Select the type of account that best suits your needs. Remember that the more features you include, the higher the potential bank charges.
Consider whether the bank account will be opened as an individual. Income tax is the only direct tax levied on the Isle of Man. For individuals, there is a standard rate of 10%, a higher rate of 18% and generous personal allowances. The island does not levy any capital gains tax, wealth tax, stamp duty, death duty or inheritance tax.
Consider whether you will open an account as a company. From the 6th April 2005, a standard zero rate of corporate tax has existed, with a higher rate of 10% applied to certain regulated businesses.
Research carefully which Isle of Man bank best caters for your needs. Factors to consider include whether you want the bank account is as an individual or a company, what kind of company you would be registering, and how much money you want to deposit into the account. Different banks will offer different interest rates depending on these factors.
Ensure that any provider contemplated has a respected parent company that will not go bankrupt. Banks on the Isle of Man are well regulated, so an account holder generally has protection against banks going bust.
Consult an international tax adviser to formulate your tax strategy. Don't consult your bank on issues regarding taxation. When you are looking to avoid taxation in your home country, the less your offshore bank knows the better.
Declare earnings in your home country on earnings that are passing into your home bank account. Remember that this is generally illegal.
Ensure that you declare your income accurately and honestly to the Isle of Man government.