Tax Matters 2024/25

* Subject to an irrevocable Tax Cap election being made, individuals have the option to elect for a ten year period, with the five year election also remaining available. The maximum income tax liability for an individual who has made the election is £200,000, or £400,000 for a jointly assessed couple. For any five year Tax Cap elections which commenced up to and including the 2019/20 tax years, the amount charged for each year is the value of the Tax Cap applicable in the first tax year covered by the election.  

* 15% rate only applicable where the corporate taxpayer has, within the meaning of the OECD’s Global Anti-Base Erosion Model Rules, an ultimate parent entity or intermediate parent entity located in a jurisdiction that has implemented an IIR for fiscal years commencing on or after a date that is no later than 1 January 2024.

** Retail businesses with taxable profits of over £500,000 are subject to tax at 10%, those with taxable profits below that level are subject to tax at 0%.

• Standard rate 20%
• Lower rates of 0% or 5% apply in certain circumstances.
• Registration threshold from 1 April 2024 £90,000 (2023 - £85,000).

There are no inheritance, wealth, gift, death, capital gains, insurance premium taxes, or stamp duties in the Isle of Man.

Standard rates are shown. These figures may alter if an employee elects to contract out.

Taxation of Car and Fuel Benefit

In line with the Isle of Man's aim to reduce emissions through the Climate Change Plan 2022 to 2027, the calculations for car and fuel benefits given by employers to employees have been updated with effect from 6 April 2024.

The car benefit is now determined by a seven-step calculation, while the fuel benefit is calculated in two steps. These calculations and working examples can be found in full in the Benefit in Kind - Practice Note (20 February 2024).

It is important to note that there are additional rules for (1) cars that run on road fuel gas; (2) certain classic cars; (3) shared cars; and (4) where two or more cars are available at the same time to the same person.

Chargeable benefits with an aggregate value of under £600 for the year are exempt from tax.

Exempt benefits

• Accommodation used solely for duties of employment.

• Approved Profit Sharing or Savings Related Share Options Schemes.

• Car Parking space at or near place of work.

• Medical/dental insurance.

• Christmas party expenses up to £100 per head.

• Provision of a personal computer for use at home up to benefit value of £1,000.

• Nursery or creche facility expenses necessary for employees to attend work.

• Bicycle and related safety equipment provided under a cycle to work scheme up to an annual maximum value of £1,200.

* Increased fees apply where returns are filed late.

Flexible pension options exist via either of two common types of IoM scheme, being a Self-Invested Personal Pension (SIPP) and the Pension Freedom Scheme (PFS). 

A comparison of the key features of the two types of scheme is below:

* With treaty relief if applicable. Income restricted based on published limits.

Rates 24/25 and 23/24 (%)  

Plant and machinery

• First year allowance - 100
• Writing down allowance - 25

Industrial buildings and structures

• First year allowance - 100
• Writing down allowance - 4

Agricultural buildings

• First year allowance - 100
• Writing down allowance - 10

Tourist premises

• First year allowance - 100
• Writing down allowance - 10

For a motor car a first year allowance/writing down allowance of 25% may be claimed each year up to a maximum of £3,000 per annum.