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Tax for a small company and relocating to the Isle of Man

I am the director and my wife the secretary of a small private company limited by shares that makes specialised optical equipment. Apart from the two of us, we have no permanent employees and subcontract all manufacturing work to third parties. About half of the company's income is generated from the sale of said equipment and the rest through research contracts which I personally undertake. The customers of our products are worldwide while the research contracts are from the UK government. My wife has a day job as a nurse but earns a fraction of what our company makes, and our children can be re- schooled elsewhere.

Basically, there is no geographical requirement for us to be resident anywhere and our customers/clients can pay for our goods/services to any specified account.

A pessimistic forecast for revenue for the next fiscal year is about £250k; an optimistic forecast about £500k. Net profit is roughly half that. My wife and I are paid a salary from the company and we bill applicable expenses to the company - hospitality, premise rental, mileage and so on.

Can someone please explain in layman's terms whether my wife and I can benefit from a move to the Isle of Man, or setting up a company there to which payments for goods/services are made?

Do we need to be physically resident there to qualify for IoM tax rates? Would it suffice, for example, to appoint an IoM solicitor's firm as the company's address?

Thank you for any responses.

Peter

Reply to
Peter Sinclair
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I would have thought that a solicitor's or accountant's firm would suffice for you to register a company in IoM, and that company would then not be subject to UK corporation tax.

But any personal income you derived from that company, or indeed from any foreign source, would continue to be subject to UK income tax while you still lived here. I gather that to escape UK personal taxation you would need to be resident abroad (not necessarily in IoM). Of course that doesn't mean you couldn't *also* spend a lot of time here, even owning a home here, but you would be limited to spending at most 182 days physically in the UK during any tax year (i.e. you'd need to be abroad for at least 50% of the year).

Reply to
Ronald Raygun

To qualify for non tax residency year on year, you can only be in the UK for (an average of) 91 days per year. The 182 figure is for a person who comes to the UK for one year only.

Note that the revenue are looking to make it even harder to claim non residency in the UK in the future (they are even trying to change it retrospectively).

tim

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Reply to
tim....

Well I have nothing useful to add, but just wanted to say "well done". You sound like you are in a very good position and yep, I'm just a little jealous. :-)

Reply to
Theodore

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