Isle of Man solution to save on CGT for houses?

There is a good article in the Times about the impact of Capital Gains Tax on property portfolios:

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One of the suggested solutions is to place the holding company on the Isle of Man. Are residents in England & Wales allowed to own companies on the Isle of Man and benefit from this tax saving without actually living there?

I thought the procedure for most wealthy individuals was to set up a trust in Jersey and be named as the beneficiaries of that trust. Then the "trust" owns the properties and the "beneficiaries" are under the instruction of the "trustees" (who are almost always undisclosed)?

Reply to
alexrpeters
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Yes, you can own an IOM company.

Doing this in the Isle of Man is just as legitimate as doing business with a Jersey or Guernsey Trust Company.

How this usually works is that the Isle of Man has a double-tax treaty with the UK. Therefore, if the IOM sets some of its tax rates at 0%, you have already been taxed in the IOM, and cannot be taxed on income / gains again in the UK.

However, you must be aware that HMRC are always well aware of the various loopholes (these type of arrangements now have to be registered with them) and usually get round to blocking them at some point. So usually it is a case of 'Buy whilst stocks last...'

Rgds Neil.

Financial Calculators & Tools

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Reply to
neil

I thought only financial institutions had to register tax avoidance schemes and not individuals.

Do I have to register my mobile phone as being a tax avoidance scheme?

Reply to
Fred

Daytona

Reply to
Daytona

Sorry,

I did mean that it was institutions that had to register their tax mitigation schemes.

Reply to
neil

Usually what happens is that you pay the difference between the UK tax bill and the foreign tax you have already paid, so for an IOM company, you would have to pay the whole lot.

The double taxation agreements are there to stop people who set up business abroad for legitimate reasons from being clobbered with tax in both companies. It generally doesn't let you escape tax altogether. Usually you end up paying the higher of the UK tax liability and the foreign liability.

Reply to
Jonathan Bryce

This is an incorrect statemenet of law. There is no general "has already been taxed therefore cannot be taxed again rule".

I have however seen this line spun many times wrt IoM income and I really would like to know the source of this claim. There may be some truth in it wrt some types of income or it could just be some over ambitious saleman telling porkies.

tim

Reply to
tim (back at home)
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What if you invest the money in the IOM, and visit once a year (say late May[0]), but don't repatriate any income/gains to the UK and instead spend them locally on, err, Bushey's?

rgds, Alan [0] see .sig for hint ;->

Reply to
Alan Frame

This is a newsgroup, not a TV quiz.

tim

Reply to
tim (back at home)

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