IOM companies which have a turnover of £81,000 per annum or more may have to register for VAT (VAT is a sales tax chargeable throughout the European Union) and must prepare and file quarterly VAT returns. Isle of Man entities are required to produce accounts and file tax returns in a timely fashion if fines and other penalties are to be avoided. Sovereign can act as the “Fiscal Agent” for your entity and complete and file the necessary returns, assisting with the preparation of the accounts, introducing the entity to and liaising with a suitable auditor and liaising with the tax department to ensure that the obligations of the entity are met in full.
Gibraltar-based RegisterAnAircraft.com (RANA) is the aviation division of The Sovereign Group. Combining the experience acquired over 20 years in the field of aircraft registration and offshore company management, RANA offers a complete range of professional and highly tailored services to aircraft owners and operators worldwide. An aircraft is only eligible for the Isle of Man Aircraft Registry (IOMAR) if it is for private or corporate use. To gain registration, all aircraft must be certified by the European Aviation Safety Authority (EASA) and also have a conforming Type Certificate.
Sovereign is able provide introductions to a number of banks in the Isle of Man and elsewhere in the world with which we have long-term relationships. Sovereign can also assist with account opening procedures.
The Isle of Man has built a world class reputation as an e-Gaming jurisdiction. The following are just some of the benefits of establishing an e-Gaming business on the IOM: low betting duty of between 1.5% and 0.1% on gross profit; world-class infrastructure, bandwidth and power resilience coupled with excellent data hosting facilities; excellent peripheral providers for marketing, software and IT; supportive legislation; and consumer focused regulation and player protection. Sovereign has experienced advisers who can assist with acquiring an e-Gaming licence.
The Isle of Man Foundations Act 2011 provides an alternative to more traditional Isle of Man trust structure, particularly for clients in non-common law jurisdictions. The uses of Isle of Man foundations include succession planning, charitable and philanthropic purposes, and asset holding vehicles (for example, commercial assets such as private jets) for non-charitable purposes. Sovereign can assist with all aspects of setting up and registering an Isle of Man Foundation and can act as a council member, an enforcer and a registered agent. Sovereign is also able to provide full administrative services enabling a Foundation to perform including the preparation of financial statements, accounts, the completion and filing of tax returns and the opening and maintaining of bank accounts.
Download the IOM Foundation Information Sheet here
The Isle of Man Companies Act 2006 provides a robust legal framework for a flexible and cost-effective corporate vehicle that is attractive to both international businesses and investors. This structure offers tax neutrality at the holding company level: an Isle of Man company is not subject to any income or capital taxes in the Isle of Man; there are no withholdings on the payment of dividends or interest on loans; and no stamp duty or other similar taxes are levied in the Isle of Man on the issue or transfer of shares in an Isle of Man company. The Isle of Man is also the only offshore jurisdiction that is part of an onshore VAT network. The ability to deal with VAT registration and filings in the Isle of Man is a potential advantage for any UK or EU business seeking to establish a holding company in a tax neutral jurisdiction.
Insurance is one of the most effective ways to manage risks and protect your assets, and is a vital part of the wealth management process. Gibraltar-based Sovereign Insurance Services (SIS) provides a full range of insurance broking services – from home, contents, travel, accident and life cover through to more complex products such as “key man”, professional indemnity and kidnap and ransom cover – at the most competitive pricing levels available in the international insurance markets. SIS is licensed by the Gibraltar Financial Services Commission to act as an insurance intermediary for general insurance business within the European Economic Area (EEA) but also has strategic partnership arrangements with a series of underwriters and brokers throughout the international insurance community so as to be able to meet a client’s insurance requirements anywhere in the world.
International Tax Planning
It is relatively straightforward to set up or purchase a company but it is vital to get proper advice on how to structure the ownership of that company, how it should be administered and how to organise its commercial arrangements. Every case is different and a high level of expertise is required to ensure that the advice is up-to-date, effective and fully compliant. Once we have understood your personal and business requirements, Sovereign is in a unique position, through its global network of offices, to advise on a suitable structure which will meet those needs and should result in significant tax savings.
The Isle of Man Register is a Category 1 British Red Ensign Register, which can register vessels of unlimited type and size. It is the flag of choice for many large shipping corporations operating all vessel types to very exacting standards. It currently has over 12m gross registered tonnes on its register, of which over 50% of vessels are tankers. The Isle of Man has a reputation for the quality and service provided by the Ship Registry team at very reasonable costs for the operator. It provides a 24/7 service to its operators and out-of-hours registration to suit clients’ needs.
The Isle of Man is also the flag of choice for the most prestigious of the world’s superyachts. A yacht is eligible to be registered on the island if it is a British ship – the majority interest in the yacht (at least 33/64 shares) must be owned by an Isle of Man company or a company incorporated in the UK, the EU or any British Dependent Territory, or a citizen of these jurisdictions. Foreign nationals may obtain the advantages of Manx registration by having their vessels owned by an Isle of Man company. Advantages of registering a yacht in the Isle of Man include:
- No annual tonnage tax;
- No income tax payable on charter profits;
- Entitlement to the support of the UK government, including worldwide consular services;
- No requirement to disclose details of the beneficial owners of the company at time of resignation;
- If a vessel is owned by a company then all transfer taxes and re-registration charges can be avoided by simply effecting a transfer of shares in the company instead of changing ownership of the vessel;
- A company is not subject to any charge to inheritance tax. If the shares of the company are held within a suitable trust then it is possible to protect against worldwide inheritance tax.
An EU-resident yacht owner wishing to keep a yacht in EU waters will be expected to demonstrate that VAT was originally paid on the yacht or that it has VAT-paid status. Use of an Isle of Man company can enable the VAT paid on the purchase of a yacht in certain circumstances to be reclaimed, whilst retaining the VAT-paid status of the yacht.
Gibraltar-based RegisterAYacht.com (RAY) is the marine division of The Sovereign Group. It was formed in 2000 to provide marine corporate and administration services to yacht owners, as well as to maritime law firms, yacht managers and brokers and other professional firms involved in the yachting industry. RAY is able to assist with transfers to company ownership and all registration formalities. Initially established to register vessels under the British Red Ensign, RAY is now registering, administering and managing yachts – both pleasure and commercial – on a worldwide basis.
Overseas Property Ownership, including UK
Sovereign assists many of its clients with the acquisition of real estate worldwide. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our regional knowledge of property ownership laws and regulations, along with our tax planning expertise, we can help you reduce any potential exposure. Most people who own or intend to own property abroad will not be fully conversant with local legal procedures or taxes – stamp duties, municipal and wealth taxes – and may not fully recognise the longer term implications in terms of potential exposures to capital gains tax, inheritance tax or forced heirship rules. Substantial benefits may be derived through the use of corporate, trust or foundation structures to address these issues. Many property developers in the UK use Isle of Man structures. Their companies can register for UK VAT but not pay corporation tax. They can then also reclaim the VAT.
By outsourcing your payroll you can free up your valuable time and resources to concentrate on the important business of running your company. Sovereign can provide a comprehensive yet flexible outsourced payroll service tailored to each of our client’s specific requirements.
Pension plans are an important component of all wealth planning. Sovereign offer a range of retirement savings solutions and pension plans including Qualifying Recognised Overseas Pension Scheme (QROPS), Qualifying Non-UK Pension Scheme (QNUPS) and other retirement savings options.
Under UK legislation, effective from April 2006, expatriates or UK residents who have a demonstrable intention to move overseas may transfer the value of their UK pension rights to a non–UK pension scheme and thus potentially avoid exposure to UK tax and many of the UK pension fund restrictions. The Isle of Man is one of the world’s leading jurisdictions for pension transfers and Sovereign has developed a market-leading range of HMRC-recognised pension products including the Aegean Personal Pension Plan QROPS (for pensions with a value greater than £100,000) and the Aegean Lite Personal Pension Plan QROPS (for pensions with a value less than £100,000). Both schemes were established in the Isle of Man by Sovereign Pensions Limited, which is registered by the Isle of Man Financial Services Authority as a professional retirement benefits scheme administrator.
Key features of the schemes include:
- Retirement income may be drawn commencing at age 55;
- Up to 30% of the value of a member’s pension fund may be withdrawn as a Pension Commencement Lump Sum (PCLS) at the time benefits are taken;
- There is no Isle of Man withholding tax on payment of PCLS;
- Isle of Man income tax of 20% is applied to all retirement income paid but, if a relevant double tax treaty is not in place, additional taxes may be due in the member’s county of residence;
- The pension fund can be used by the member for their lifetime and any remaining balance can be passed on to their spouse/civil partner or dependants upon the member’s death with a 7.5% deduction of tax at source in the Isle of Man;
- Investments can be made and paid in any major currency.
An international retirement savings plan is a low cost, highly efficient method to plan your retirement and long-term future. It enables you to accumulate wealth to fit your financial circumstances as they change. There is no need for a regular fixed monthly commitment as assets can be added to the plan at any time. Free from income or capital gains tax, retirement fund growth will be maximised from the outset. International retirement savings plans can be established as individual plans, joint plans for spouses or as multi-member plans.
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There is no requirement for standard Isle of Man companies to have Isle of Man-resident directors but Sovereign is able to provide directors if required.
Trademark and Intellectual Property Services
The intellectual property (IP) associated with a business name or system can be one of its most valuable assets – but only if it is properly protected. Any business that wishes to establish a national or international identity should take steps to protect the use of its name, logo or other IP, such as patent rights, formulae/processes, designs, trademarks, franchises, licence agreements, “know-how” and copyrights. Given the importance of IP to modern businesses, Sovereign has established an intellectual property division that specialises in registration, monitoring, advice and proactive assistance.
Income from IP rights may be derived by way of royalties. As with other sources of income, the tax planning of IP should focus on maximising the after-tax profits. To ensure that arrangements made to receive royalties are effectively constructed, it is necessary to analyse how various countries treat the payments of royalties, whether tax is withheld on such payments and how the income receipts and expenditures are treated. Combining a low tax jurisdiction with membership of key intellectual property international treaties makes the Isle of Man the ideal base for businesses wishing to protect their intellectual property.