I'm in trouble. When I was in the Isle of Man (IOM) last week I was cornered by a nice man from the Isle of Man Examiner who asked me various questions I can't now remember about my views on the IOM.
It seems that I referred to it as a tax haven. I meant this kindly. I thought that being a tax haven was good thing. Apparently not. The article goes on to stress that even David Cameron has said that the island can no longer be considered a tax haven.
One of my new friends from the IOM has been in touch to say that the IOM is better considered a "low-taxed financial centre" in that it is accepted by the IMF and the OECD, and has hordes of tax agreements on disclosure regarding non-residents of the IOM.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The OECD (in November 2011) even released a Tax Transparency Report assessing over 50 jurisdictions, and found the Isle of Man to be one of eight countries to be fully compliant in all main areas with no significant improvements required.
I think this might a problem of vocabulary. For me, the phrase tax haven' doesn't automatically suggest any kind of dishonesty or evasion (although I accept it often includes it), just avoidance. And if you are resident in the IOM instead of, say, the UK, you can avoid one hell of a lot of tax.
There is no capital gains tax, there is no inheritance tax, there is no corporation tax, there is no stamp duty, and income tax comes in very low indeed: the top rate is 20%. It is also capped at £120,000. No one pays more.
The island also looks pretty good in economic terms. It has 29 years of GDP growth behind it, and no debt. So it's a great haven from all sorts of things where you can also pay a great deal less tax than elsewhere. A tax haven or not a tax haven?
PS Buying a nice house in a not-a-tax-haven such as the IOM is not as expensive as you might think. Here's a nice cottage for £335,000, and a pretty Victorian villa for £425,000.Top end houses aren't cheap, but they aren't that much more expensive than houses in the south east of England (where you have to pay increasingly ridiculous rates of stamp duty). If I were looking,I might look at this.
-
M&S and Tesco among those warning of a £7bn Budget hitSeventy-nine UK retailers have written to Chancellor Rachel Reeves about possible price rises and job cuts - here is what it means
-
How much does it cost to move home under the Labour government?Home-moving costs are rising and could get more expensive once stamp duty thresholds drop in April 2025
-
Our pension system, little-changed since Roman times, needs updatingOpinion The Romans introduced pensions, and we still have a similar system now. But there is one vital difference between Roman times and now that means the system needs updating, says Merryn Somerset Webb.
-
We’re doing well on pensions – but we still need to do betterOpinion Pensions auto-enrolment has vastly increased the number of people in the UK with retirement savings. But we’re still not engaged enough, says Merryn Somerset Webb.
-
Older people may own their own home, but the young have better pensionsOpinion UK house prices mean owning a home remains a pipe dream for many young people, but they should have a comfortable retirement, says Merryn Somerset Webb.
-
How to avoid a miserable retirementOpinion The trouble with the UK’s private pension system, says Merryn Somerset Webb, is that it leaves most of us at the mercy of the markets. And the outlook for the markets is miserable.
-
Young investors could bet on NFTs over traditional investmentsOpinion The first batch of child trust funds and Junior Isas are maturing. But young investors could be tempted to bet their proceeds on digital baubles such as NFTs rather than rolling their money over into traditional investments
-
Negative interest rates and the end of free bank accountsOpinion Negative interest rates are likely to mean the introduction of fees for current accounts and other banking products. But that might make the UK banking system slightly less awful, says Merryn Somerset Webb.
-
Pandemics, politicians and gold-plated pensionsAdvice As more and more people lose their jobs to the pandemic and the lockdowns imposed to deal with it, there’s one bunch of people who won’t have to worry about their future: politicians, with their generous defined-benefits pensions.
-
How the stamp duty holiday is pushing up house pricesOpinion Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb.
