Property Developers Tax

[happy camper]

Looks like a form of capital gains tax to me, basically there to stop the quick buy-and-sell that some of our less caring property businesses can get involved in.

Your first/only home is exempt though, so my earlier fears were unfounded.

 

Not sure how you do this and continue to advertise yourself as a tax haven, however!

[ian rush]

Having a tax on multiple property ownership on the Isle of Man will never work as the corporate service providers industry is premised on the fact that beneficial ownership of companies doesn't have to be declared.

 

At it's simplest, the most liekly result is that the astute investor would incorporate a company for each property they want to own.

[Slim]

I did notice that all the cases referred to persons and not companies.

[simon]

Having a tax on multiple property ownership on the Isle of Man will never work as the corporate service providers industry is premised on the fact that beneficial ownership of companies doesn't have to be declared.

 

Would that really raise any issue? As far as I can work out - the proposal is that a form of capital gains tax should be levied on the sale of all properties other than a primary residence. Quite right too IMO.

 

I think that it would be for the property owner to show / declare that the property was the primary residence - and that it was, hence, tax exempt. But the assumption would be that tax was due. At the time of the sale.

[P.K.]

Same as the UK. If it is not the main residence or has been rented out at any time then when it is sold it is subject to Capital Gains.

[FCMR]

If you own a property on the IOM and build/buy another and sell within two years, you are Taxed at 18% on the profit. Fact

[simon]

If you own a property on the IOM and build/buy another and sell within two years, you are Taxed at 18% on the profit. Fact

 

If that's true then I may owe some back tax and would want to sort it out. When was this introduced - any idea? Does it apply to individuals? In my case this would relate to a flat bought and resold over the period (roughly) 2000 - 2002. Certainly the advocate didn't make me aware of any potential tax liability - and there was nothing which related to this on my annual tax return.

 

Are you certain that this is accurate? If so then I'm somewhat flummoxed as to how I was supposed to know about this if it is true. I've witnessed and been involved with property transactions in other jurisdictions and it has always been the responsibility of the lawyer to explain any potential tax liability connected with a transaction where disclosure (of profit) is a legal requirement.

 

EDIT: as I posted above - I do believe that the sale of anything other than a primary residence within a certain period should represent a potential tax liability. I just wasn't aware that it already does, on the IOM.

[FCMR]

It is true, and its your job to declare unearned income to the tax office, not your Advocate.

[simon]

With all other aspects of earned and unearned income, that I can think of, - there is a specific box (or set of questions) on the annual tax return which relate to these questions. There is currently no set of boxes (AFAIK) which relate to the sale of second properties.

 

I'm not arguing with you FMCR. I'm going to find out and pay my outstanding taxes if an issue exists. But if any tax is due, or there is a potential liability for tax, then I'm going to want to know why I was never told by the advocate - or the government system. And the government is notified of all property transactions. There was nothing on the tax return form - and no additional paperwork or forms were supplied.

 

I'm absolutely in favour of taxation (I believe that we should all pay much higher taxes than currently) - but you can't pay your taxes if you don't know that they are due. We might all be responsible for any number of potential criteria which we know nothing about. So, if what you are saying is accurate, then there is a lack of good information.

 

If I was potentially liable for tax then I believe that I would have automatically been sent a form to complete. It would have been a part of the normal process of a property transaction. And my advocate should have notified me of any legal requirements of declaration relating to the sale. Or else, how else, was I supposed to know.

 

I'm not some mogul or property speculator and the extra flat was not bought or sold for business or investment reasons. Not that this should make any difference.

 

I have the impression that you may have accidentally posted less than complete information. Otherwise (for my example) - this might also very much affect anyone who had taken a bridging - loan between two properties - and had then seen the sale price of the original property increase.

[Slim]

I'm fairly certain there is no capital gains tax at all on the island, its one of the attractions. FCMR do you know this to be true from personal experience?

[FCMR]

I'm fairly certain there is no capital gains tax at all on the island, its one of the attractions. FCMR do you  know this to be true from personal experience?

<{POST_SNAPBACK}>

 

I built a house that turned out to be to big for my needs, I sold it six months after completion, said nothing to the taxman but the taxman found out I had banked a fare sum of money. It was explained to the taxman how I aquired the money. I then had to produce the costings for the land and the building, after these sums were deducted I was taxed on the profit. We contested and lost as the profit is classed as unearned income. If I had kept the house for two years and then sold it, I would not of been taxed.

[Slim]

Is that perhaps because you're involved in the building trade? Either way, I'm going to phone the tax office today and check, thanks for the heads up.

[simon]

I built a house that turned out to be to big for my needs, I sold it six months after completion, said nothing to the taxman but the taxman found out I had banked a fare sum of money. It was explained to the taxman how I aquired the money. I then had to produce the costings for the land and the building, after these sums were deducted I was taxed on the profit. We contested and lost as the profit is classed as unearned income. If I had kept the house for two years and then sold it, I would not of been taxed.

 

Right. So would it be right to think that (the tax people decided that this) was a job - done by your building business? Rather than a simple private property transaction?

 

What you said:

 

If you own a property on the IOM and build/buy another and sell within two years, you are Taxed at 18% on the profit. Fact

 

But I'm still not convinced that this currently applies to private sales. And I wonder how the difference is defined.

 

Suppose I ran a business buying and selling second hand motors. But some Sunday mornings I sometimes bought and sold a few privately. My private collection. A similar situation?

[Slim]

OK, called the tax office. There is no tax liability currently for private individuals making a profit by sellign property. Definately. I asked him under what circumstances it could be tax liable, and he said that a business could be liable for tax, perhaps thats how fcmr got stung.

[happy camper]

for checking that out, Slim.