Changes To Tax Information Exchange With Uk

[Skeddan]

 

This new agreement made on Monday this week doesn’t seem to have made the news. Did I miss something?

 

29/09/2008 - The Isle of Man and the United Kingdom announced that they have signed a bilateral agreement for the exchange of information for tax purposes,

http://www.oecd.org/document/43/0,3343,en_...1_37427,00.html

 

The new TIEA seems to be pretty sweeping – making all kinds of information available to the UK tax people, provision to allow them to get IoM to gather additional information they may possibly foreseeable require, conduct tax interviews in IoM etc. It's by no means clear, but this may possibly now already been in force as from 29th September.

 

The agreement is here:Clicky

 

The proposals were set out in a letter from the UK of 29th September – the same day as the announcement of signing the agreement, so presumably Tony Brown sent this reply accepting this the same day.

 

I am able to confirm that the contents of your letter dated 29th September 2008 are acceptable to the Government of the Isle of Man, and therefore that this letter together with your letter and its Appendices constitute our mutual acceptance of the provisions of the Agreement and the Arrangement between the Isle of Man and the United Kingdom of Great Britain and Northern Ireland

 

Please accept, Sir, the assurance of my highest consideration.

For the Government of the Isle of Man

J Anthony Brown

Chief Minister

Is the Chief Minister now 'the Government of the Isle of Man' or had this already been approved by Comin, Tynwald or whatever?

 

Prepared statements by a Financial Secretary to the Treasury are not usually careless – so I wonder what should be made of this:

The financial secretary to the Treasury Jane Kennedy MP said:

"This new tax information exchange agreement represents a significant step in our efforts to counter and prevent tax evasion and avoidance. I welcome the Government of the Isle of Man's willingness to implement these high standards of transparency and exchange of information and acknowledge their commitment."

http://www.accountingweb.co.uk/cgi-bin/ite...o%20%25B%20%25Y

 

As I understand it: Tax avoidance is the legal utilization of the tax regime to one's own advantage, in order to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by illegal means.

 

Is anyone up to speed with what's going on here?

[manshimajin]

As I understand it: Tax avoidance is the legal utilization of the tax regime to one's own advantage, in order to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by illegal means.

 

Is anyone up to speed with what's going on here?

Thanks for posting this - first time I have seen it. My understanding was that managing your affairs to reduce the amount of tax payable is 'tax minimisation' rather than avoidance - but that is a minor point. If people are deliberately using the IOM to illegally avoid paying tax that they are obliged to pay in another legislature then they must expect that the IOM Government is not here to protect them from the consequences or to facilitate their carrying out of an illegal process.

 

On the other hand does one detect further evidence of the creeping hand of the UK into Manx affairs? The UK Government seems to be essenally living off borrowings these days so every little penny counts. Will the IOM get some benefit back in return for agreeing to this?

[Moghrey Mie]

As I understand it: Tax avoidance is the legal utilization of the tax regime to one's own advantage, in order to reduce the amount of tax that is payable by means that are within the law. By contrast tax evasion is the general term for efforts to not pay taxes by illegal means.

 

Is anyone up to speed with what's going on here?

Thanks for posting this - first time I have seen it. My understanding was that managing your affairs to reduce the amount of tax payable is 'tax minimisation' rather than avoidance - but that is a minor point. If people are deliberately using the IOM to illegally avoid paying tax that they are obliged to pay in another legislature then they must expect that the IOM Government is not here to protect them from the consequences or to facilitate their carrying out of an illegal process.

 

On the other hand does one detect further evidence of the creeping hand of the UK into Manx affairs? The UK Government seems to be essenally living off borrowings these days so every little penny counts. Will the IOM get some benefit back in return for agreeing to this?

 

 

Yes, the negotiated agreement is that pensioners who come here with UK pensions will be taxed at lower IOM rates rather than UK rates and IOM government will get to keep the tax.The pensioners will have an extra £1,000 per year spending power.

The IOM government is probably waking up to the fact that having a quarter of your population over the age of 60 is an expensive venture. Pensioners require health and social services etc etc.

[Sebrof]

The IOM government is probably waking up to the fact that having a quarter of your population over the age of 60 is an expensive venture. Pensioners require health and social services etc etc.

 

It's expensive if said pensioners have only a state pension to live on. Most pensioners I know who came over to the island to retire have rather more than that, and thereby make a very useful contribution to the economy.

 

S

[Moghrey Mie]

The IOM government is probably waking up to the fact that having a quarter of your population over the age of 60 is an expensive venture. Pensioners require health and social services etc etc.

 

It's expensive if said pensioners have only a state pension to live on. Most pensioners I know who came over to the island to retire have rather more than that, and thereby make a very useful contribution to the economy.

 

S

 

 

I didn't say otherwise. It's just a fact that older people require more health care and social support. Even your rich friends may have heart attacks and get diabetes or Alzheimer's disease and they'll expect to be looked after by qualified people.

[monasqueen]

the negotiated agreement is that pensioners who come here with UK pensions will be taxed at lower IOM rates rather than UK rates and IOM government will get to keep the tax.The pensioners will have an extra £1,000 per year spending power.

 

Sorry, have I missed something? Where does the extra £1,000 come in?

The difference is that UK pensions can be paid gross from next April, so that all of the tax due will be payable to IOM Gov., rather than have the Gov give credit for tax paid in the UK (which resulted in financial misery for IOM, and no gain for the pensioners). There is still tax due on most pensions, and they would have to be pretty big for the tax difference to amount to £1,000?