Iom Tax Authorities-stealth Introduction Of Inheritance Tax

[spock]

The Isle of Man's Tax Doctor, at an early evening seminar tonight, confirmed that a new tax is to be introduced.

 

It will be at a starting rate of 7.5%.

 

It will be applicable to a pension fund left, when the pensioner dies, and the fund becomes available to the spouse or children. I.e. it is a tax on inheritance.

 

As far as the information is available in our database we are not able to find any previous examples of such a tax having been levied previously on residents of the Isle of Man. Therefore a precedent is being set, albeight at only 7.5% to start - but once set will it increase, will it be introduced on other forms of 'inheritance'.

[TerryMcCann]

Yes you're most certainly back aren't you?

[Max Power]

Well, for this to be introduced it must first be passed by Tynwald. But surely this is just some form of income tax on working beneficiaries of someone else's pension? Inheritance tax would be payable on anything bequeathed to anyone, working or not.

[oldmanxfella]

Inheritance tax is a tax on your estate - a death tax. This does not look like a tax on your estate it looks like a small income tax charge so your family can get the money you paid into your pension back (which you probably got tax relief on at 18% in the first place).

[guardone]

Well, for this to be introduced it must first be passed by Tynwald. But surely this is just some form of income tax on working beneficiaries of someone else's pension? Inheritance tax would be payable on anything bequeathed to anyone, working or not.

 

Perhaps I missed something, but the government website says there is no inheritance tax on the Isle of Man. Please confirm that at present there is no IHT , and if there is, give me info. Thank you

[monasqueen]

Perhaps I missed something, but the government website says there is no inheritance tax on the Isle of Man. Please confirm that at present there is no IHT , and if there is, give me info. Thank you

 

If they brought in Inheritance Tax, there'd be a queue for the next morning's boat

 

What is being talked about here is a tax charge on amounts being taken out of a pension fund, for a purpose other than payment of a pension. As oldmanxfella said, tax relief will have been given on the original payments into the fund, and tax will not have been charged on any growth in the fund.

 

The charge will become more common, because at the moment the purchase of an annuity is compulsory, so on death, there is no fund left to pass on to spouse or dependents. From April 2008, the purchase of an annuity will no longer be compulsory, so there will be more residual funds which can be passed on.

 

Compare the Manx Income Tax charge of 7 1/2% in relation to this with Guernsey/Jersey at 20%, and the UK, who charges Inheritance Tax on top of Income Tax, so the total charge can amount to 82%.

 

So all right, you don't have to get on the boat yet!!

[ai_Droid]

What is being talked about here is a tax charge on amounts being taken out of a pension fund, for a purpose other than payment of a pension. As oldmanxfella said, tax relief will have been given on the original payments into the fund, and tax will not have been charged on any growth in the fund.

 

Thanks for clarifying that, great post.

[spock]

Glad to have that clarified for the forum. A Science Officer is not the same as a Tax officer.

 

Live long and prosper

[oldmanxfella]

Glad to have that clarified for the forum. A Science Officer is not the same as a Tax officer.

 

Live long and prosper

 

But what is a science officer who does CSP work?