The Isle of Man budget for 2011 to 2012 took place on 15 February 2011. The proposals announced have no direct impact on Royal Skandia’s business.
A summary of the main changes are detailed below:
The rates of tax payable for individuals and companies remain the same for 2011 to 2012, but some of the allowances for individual’s have been increased.
|
|
|
| Income Tax Rates and Allowances |
2010-2011 |
2011-2012 |
| Standard Personal Allowance |
Single person |
£ 9,300 |
£ 9,300 |
| Married couples |
£18,600 |
£18,600 |
| Additional Personal Allowance for over 65's |
|
£ 2,020 |
£ 2,020 |
| Personal Allowance Credit |
Single person |
£ 650 |
£ 700 |
| Married Couples |
£ 1,300 |
£ 1,400 |
| |
| Standard rate income tax |
First £10,500 |
10% |
10% |
| Higher rate income tax |
Income over £10,500 |
20% |
20% |
- Tax relief has been removed on Class 4 National Insurance Contributions but the Island will not be following the UK in increasing NI class 1, 2 and 4 contributions by 1%.
- Tax relief has also been removed on new Educational Deeds of Covenant, and revenue generated will be reallocated to student awards.
- The cap that exists for Mortgage and Loan Interest relief is to be reduced by £2,500 to £7,500 per person per annum.
Removal of the Attribution Regime for Individuals (ARI)
From April 2012, the ARI will be repealed. The ARI is designed to deter local shareholders from avoiding Manx personal tax by rolling up income in companies subject to the 0% tax rate.
The Isle of Man Treasury Minister, Anne Craine, explained that this anti tax avoidance measure was set to be declared harmful under the EU Code of Conduct for Business Taxation.
The Isle of Man are committed to a policy of being a good neighbour, which encompasses being responsive to the views of the European Union. At the same time, the Isle of Man is fiscally independent, and participates in the Code of Conduct process on a voluntary basis.
Mrs Craine stated “It is not in the Island’s interests to have aspects of our tax system which the EU sees as causing difficulty, and so I have today taken what I feel is the right course and moved to abolish the ARI.”
She stated “the Isle of Man Government considers that with the removal of the ARI, our business taxation system does not have any features which can be considered harmful under the provisions of the Code of Conduct, and we have communicated that view to the Chair of the Code Group.”
Further information about the budget can be found on the Isle of Man Treasury website:
http://www.gov.im/treasury/budget/
The information provided in this article is not intended to offer advice. It is based on Skandia's interpretation of the relevant law and is correct at the date shown at the top of this article. While we believe this interpretation to be correct, we cannot guarantee it. Skandia cannot accept any responsibility for any action taken or refrained from being taken as a result of the information contained in this article.