Property Investment through the Isle of Man

The Isle of Man can offer clients an efficient and cost effective route to the establishment and operation of tax efficient property holding structures. Property holding structures can vary from the simple single shareholder Isle of Man Company acting as a special purpose vehicle to more complex collective investment schemes structured as Limited Partnerships, Property Unit Trusts, AIM listed companies and Open Ended Companies. The benefits of using Isle of Man companies and partnerships for property funds and structures include:

• no need to obtain time consuming and costly prior local regulatory approval for the establishment of closed-ended investment companies, or for open-ended property funds that are to be offered to fewer than 50 investors and that will not be the subject of a public offering;

• as the Isle of Man has its own VAT office, it is possible for Isle of Man property holding vehicles to complete VAT registration within seven days and for Isle of Man entities to VAT group with other Isle of Man entities, UK companies or Channel Islands’ companies and obtain Transfer of Going Concern rulings within such expedited time frames;

• a zero per cent tax rate and no capital gains tax or inheritance tax in certain circumstances;

• the fact that English law advisers are comfortable dealing with Isle of Man companies, trusts and partnerships, and global capital markets accept Isle of Man entities as listing vehicles, because the Island’s law (including its new flexible and modern company law) is very similar to English law;

• no Stamp Duty is payable on Isle of Man share transfers and possibilities may arise to mitigate Stamp Duty Land Tax (“SDLT”) on purchase;

• the Island is a leading listings jurisdiction for international companies admitted to trade on AIM and other markets;

• the ability of an Isle of Man company to have its shares denominated in any currency;

• knowledgeable and expert professional advisers on the Island (lawyers, accountants and bankers) who are able to service the needs of sophisticated investment entities and financial institutions. Where necessary, we are in touch with external tax professionals that can advise on all aspects of tax including Income tax, Capital Gains Tax, Inheritance tax and the implementation of SDLT mitigation schemes if appropriate to the circumstances.

How can IFG Help

IFG holds all requisite licences and has significant experience in assisting clients to select the right vehicle to suit their requirements. We can deal with the establishment of the relevant vehicles including VAT registration, registration under the Non Resident Landlord Scheme together with all ongoing administration. Furthermore we are in touch with external tax professionals that can advise on all aspects of tax including Income tax, Capital Gains Tax, Inheritance tax and the implementation of SDLT mitigation schemes if appropriate to the circumstances.

IFG does not provide taxation, legal or investment advice. The information and expression of opinion expressed in this briefing note are not intended to be a comprehensive study or to provide taxation or legal advice. Specific advice concerning individual situations should be taken and IFG can provide introductions to advisers who specialise in this area.