UK <-> Isle of Man - how do they determine residence?

[bpmd]

Hi,

I'm a British citizen thinking of moving to Isle of Man together with my business for tax and regulatory purposes.

Isle of Man is within Common Travel area where there are no border controls, somewhat like Schengen area. I presume the only parties that know where I am at the moment - in the UK or in IoM - are airlines/ferry companies, as I leave no trace passing IoM-UK border.

Imagine I keep two homes - in one in IoM, another in the UK. How does the taxman or regulator determine whether to apply UK or IoM tax/regulatory regime if they can't tell for sure which country I spend more time in? Is it alldown to self-certification, or is anyone aware of any cross-checks between tax/regulator databases and airlines/ferry companies?

I guess people in Europe have similar situation within Schengen - do the European governments have enough information to determine your actual country of residence?

Thanks!

 

[Barney2201]

We 'were' going to move to the IOM but decided we wanted a better climate (and decent restaurants!) so moved to Guernsey (if you want any info on Channel Islands just shout, best move we ever made to escape UK HMRC)...

IOM is exactly the same Channel Islands, you don't have to worry about the local goverment it's all about HMRC.

As i'm sure you are aware, it's all about ties and owning any property in the UK which you have access to (to sleep in) counts as a tie, out of the list of ties if you have 3 or more you are classed as UK tax resident. The only 'legal' way to hold property in the UK is to ensure it's not classed as personal accomodation which you have access to, so ideally rented out (probably through your IOM company). You also need to ensure you ditch any other ties to the UK such as golf club memberships.

The way they can monitor is via Air Passenger Duty as this tax is applied to all flights. When we looked at the IOM once advisor did say he had a few clients who took the ferry which has no APD to try and muddy the waters. As you would have to live by the 90 midnight rule (not spening more than 90 midnights in the UK) I would personally reccomend keeping a log of all travel, ticket numbers etc. HMRC won't coming knocking in the first instant but a few years down the line you want all the ammo available to kill any enquiry dead.

Drop me a message if you want any more info on the Channel Islands, in my opinion it;s much nicer than the IOM...

 

[JustAnotherNomad]

If they have any doubts, they will probably simply ask you for proof. Like payment receipts, utility bills (internet usage, electricity, water, ...).

 

[Isleofmanguy]

Don't forget its easy to be dual resident - being resident in IOM / CI does not mean you are a non resident of the UK ;

Your UK residence is all down to the Statutory Residence Test (as @Barney2201 alluded to) - BTW - I don't think having 3 ties makes you automatically UK resident - it just limits the number of days you can spend in the UK without becoming tax resident.

If UK think you might be resident there - then HMRC will require you to prove you aren't so the onus is on you not them.

Hope that helps.

BTW - IMHO - IOM trumps CI everytime (but then I would say that ;-) - we are nearly 5 times the size of Jersey and with less people so space to breathe here.

 

[meir13]

We 'were' going to move to the IOM but decided we wanted a better climate (and decent restaurants!) so moved to Guernsey (if you want any info on Channel Islands just shout, best move we ever made to escape UK HMRC)...

IOM is exactly the same Channel Islands, you don't have to worry about the local goverment it's all about HMRC.

As i'm sure you are aware, it's all about ties and owning any property in the UK which you have access to (to sleep in) counts as a tie, out of the list of ties if you have 3 or more you are classed as UK tax resident. The only 'legal' way to hold property in the UK is to ensure it's not classed as personal accomodation which you have access to, so ideally rented out (probably through your IOM company). You also need to ensure you ditch any other ties to the UK such as golf club memberships.

The way they can monitor is via Air Passenger Duty as this tax is applied to all flights. When we looked at the IOM once advisor did say he had a few clients who took the ferry which has no APD to try and muddy the waters. As you would have to live by the 90 midnight rule (not spening more than 90 midnights in the UK) I would personally reccomend keeping a log of all travel, ticket numbers etc. HMRC won't coming knocking in the first instant but a few years down the line you want all the ammo available to kill any enquiry dead.

Drop me a message if you want any more info on the Channel Islands, in my opinion it;s much nicer than the IOM...

Can you PM me, pls, Interested in your Sark adventure. Thx.

 

[Barney2201]

Can you PM me, pls, Interested in your Sark adventure. Thx.

PM sent

 

[meir13]

thx I sent you reply