Why is the Isle of Man a Jurisdiction of Choice

In this short article we cover some of the most attractive reasons for individuals and companies to setup or move to the Isle of Man. We’ll be looking at:

But before getting into the benefits, it might be helpful to tell you a bit more about the island and its background.

A Short Modern-Day History of the Isle of Man

During the Victorian era, the Isle of Man represented an opportunity for British families to escape to their very own Treasure Island – only, with somewhat less pirates than Robert Louis Stevenson imagined. The development of key transport links such as regular steamship crossings, on-island steam engines and streetcars etc. made navigating to the jewel of the Irish Sea all the more attractive.

By the turn of the 20th century the Isle of Man had become a thriving tourist destination, sold in the posters of days gone by as ‘Pleasure Island’ and a place to go ‘For Happy Holidays’. It is not hard to imagine why the idyllic island, with its rolling hills, sandy beaches and world class entertainment, represented a first choice for those looking to escape the hustle and bustle of a modernising Britain. The Isle of Man provided a convenient, exciting, safe and rewarding place for those who ‘do like to be beside the seaside’.

However, during the second half of the 20th century, the Isle of Man simply couldn’t compete with the draw of low cost excursions to the continent and beyond. Thus, the island’s tourism sector declined. That is, save for the (semi)constant that has persisted (World Wars or COVID-19 permitting) – The Isle of Man TT Races – one of the world’s oldest and most prestigious motorcycle road racing events.

Today, the TT Races take place over multiple laps of an approx. 37 mile course and have run for well over a century; the current fastest average speed over the 37 miles is over 135mph and reaches a top speed of almost 200mph. To give an idea of scale, the Island’s resident population is approximately 85k, and in 2019 46,174 visitors came for the TT Races.

In the latter part of the 20th century to this day, the Island has developed a flourishing financial services sector – delivering professional services to clients and advisers across the world. This has been made possible by the island’s self-governing status as a crown dependency – setting its own legal and tax regime.

In more recent years, the Island has pivoted again to develop beyond financial and professional services, with strong engineering, telecoms and software development, e-gaming and digital currency sectors, and more besides.

Why do Business on the Isle of Man?

A truly business-friendly government, ultra-modern telecoms services, transport links to all major UK and Irish business centres and very attractive rates of taxation, make the Isle of Man an ideal destination for all businesses and professionals alike.

Businesses can benefit from Corporate rates such as:

  • Most types of business are taxed @ 0%
  • Banking business taxed @ 10%
  • Retail businesses with profits of £500,000+ are taxed @ 10%
  • Income derived from Isle of Man land/property is taxed @ 20%
  • No withholding tax on most dividend and interest payments

In addition to the obvious pecuniary benefits, the island also has a deep pool of well-educated expert workers, fantastic grants from the government to both encourage new businesses and provide vocational training and many working groups and associations in direct contact with local government.

Where relocating to the island is not physically possible, there are various options available to businesses wishing to be established on the Isle of Man and avail of the local tax and legal environment. Such activity requires qualified tax advice and the assistance of a Trust and Corporate Service Provider, such as Dixcart. Please feel free to get in touch to find out more in this regard.

Why you should move to the Isle of Man?

For individuals seeking to immigrate to the Island, there are of course attractive rates of personal taxation, including:

  • Higher Rate of Income Tax @ 20%
  • Income Tax Capped @ £200,000 of Contribution
  • 0% Capital Gains Tax
  • 0% Dividend Tax
  • 0% Inheritance Tax

Further, if you are coming from the UK, the NI records are maintained in both jurisdictions and there is a reciprocal agreement in place so that both records are taken into consideration for certain benefits. State pension is however separate i.e. contributions in the IOM/UK only relate to IOM/UK state pension.

Key employees can also gain further benefits; for the first 3 years of employment, eligible employees will only pay income tax, tax on rental income and tax on benefits in kind – all other sources of income are free of Isle of Man taxes during this period.

But there is so much more: the blend of country and town living, huge number of activities on your doorstep, warm and welcoming community, high rates of employment, low rates of crime, great schools and healthcare, an average commute of 20 minutes and much, much more – in many respects the island is very much what you make it.

Furthermore, unlike some crown dependencies, the Isle of Man has an open property market, which means that those seeking to live and work on the island are free to purchase property at the same rate as local buyers. Property is far more affordable than in other comparable jurisdictions, like Jersey or Guernsey. In addition, there is no Stamp Duty or Land Tax.

Whether starting your career or moving with your family to take that dream job, the Isle of Man is a very rewarding place to be. You can register on the Locate IM’s talent pool, which has been developed to help people looking to relocate to the Isle of Man find employment opportunities as easily as possible. This is a free Government service that can be found here.

How to Move to the Isle of Man – Immigration Routes

The Isle of Man Government offer various visa routes for individuals seeking to relocate, using a blend of UK and Isle of Man processes, which include:

  • Ancestral Visa – This route is dependent on the applicant having British ancestry no further back than grandparent. It is open to British Commonwealth, British Overseas and British Overseas Territories Citizens, along with British Nationals (Overseas) and Citizens of Zimbabwe. You can find out more here.
  • Isle of Man Worker Migrant Routes – there are four routes currently available:
  • Business Migrant Routes – There are two routes:

Locate IM have produced a series of case studies that give great insight into people’s experiences with relocating to the Isle of Man. Here are two very different but equally inspiring stories – Pippa’s Story and Michael’s Story and this great video made in conjunction with a couple who moved to the island to work in the accountancy sector (anon).

Happily Ever After – How Dixcart can help

In many ways, the island can still be advertised as a convenient, exciting, safe and rewarding destination for business, professionals and their families to relocate. Whether it is assistance with creating a start-up or redomiciling your existing company, Dixcart Management (IOM) Ltd are well placed to assist. Further, where you are seeking to immigrate to the Island on your own or with your family, with our extensive network of contacts, we will be able to make appropriate introductions.

Locate IM have produced the following video, which we hope peaks your interests:

Get in touch

If you require further information regarding moving to the Isle of Man and how we can assist, please feel free to get in touch with Team at Dixcart via advice.iom@dixcart.com

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority.

UK

A Comprehensive Guide to the New Registration Requirements for Overseas Owners of UK Property

Time to take action now

Since the introduction of the Economic Crime (Transparency and Enforcement) Act 2022 earlier this year, we have been waiting for signs of when the new Register of Overseas Entities would be introduced.

  • The government have announced that the new register of overseas entities (ROE) will come into force at 9am on 1 August 2022.

As criminal offences may be committed for non-compliance with the requirement for overseas entities to register certain details (including those of the beneficial owners) to Companies House, it is time to take action now. 

Below, we explain what has changed, who you need to identify, what information is required to enable you to register and how we can help you.

What has changed since the enactment of the Economic Crime (Transparency and Enforcement) Act 2022?

The three new statutory instruments have been introduced:

In essence, an overseas entity will need to gather evidence and information required under the 2022 Act and forward this to an independent verification officer in the UK. The verification officer will then submit an application to Companies House to add the relevant entity to the register which will generate a unique Overseas Entity ID code.

Who needs to register?

The beneficial owner of any overseas entity (being a corporate body, partnership or other legal person) governed by the laws of a country or territory outside of the United Kingdom that owns, leases or disposes of qualifying real estate.

For the purposes of the Economic Crime (Transparency and Enforcement) Act 2022 a beneficial owner could be:  

What are the timelines from when the register goes live?

  • Overseas entities who already own qualifying property in the UK (excluding Northern Ireland where different rules apply) acquired at any time on or  after 1 January 1999 will have 6 months from the date the register becomes live to register with Companies House.  
  • Overseas entities acquiring freehold property or a lease granted for 7 years or more in the UK will be required to register with Companies House as soon as the register becomes live.
  • Overseas entities that have disposed of qualifying property (by sale of a freehold or the grant or assignment of a lease with 7 or more years in term or the grant of a legal charge) between 28 February 2022 and 6 months from the date the register goes live.

What information is required before registration can take place at Companies House?

Schedule 1 of the Economic Crime (Transparency and Enforcement) Act 2022 sets out the required information needed in order to register the beneficial interest at Companies House as per the below table.

*(being those who meet the thresholds for control or ownership as above)

An overseas entity may give an information notice to any person that it knows, or has reasonable cause to believe, is a registrable beneficial owner in relation to the entity.

The notice will require the person to whom it is given to state whether or not they are a registerable beneficial owner (and then provide the information above). The overseas entity may also give a person an information notice if it knows or has reasonable cause to believe that the person knows the identity of a person who is a registrable beneficial owner in relation to the overseas entity, any other beneficial owner in relation to the overseas entity, a person likely to have knowledge of the identity of a person falling into either of the first two categories.

It is an offence for the person served either notice not to; respond or to give false or make reckless statements. The person, subject to a summary conviction may face subsequent imprisonment.

The Secretary of State also has powers to require an overseas entity to apply for registration within a period of 6 months of the date of the notice. Again, sanctions apply for non-compliance.

In addition to the above, the overseas entity must also deliver one of the following three statements regarding its registerable beneficial owner and provide the relevant evidence to back up the statement as follows:

If either statement 2 or 3 above applies, then further information is required as to the “managing officer” (a director, manager, secretary). Part 4 of Sch 1 of the 2022 Act requires the additional following information to be provided in relation to the managing officer:

Who submits the information and how?

The register will be a digital service with information to be submitted in English.

Before any application for first registration or later updating applications/rectifications and amendments can take place, the information above will be subject to formal verification by a relevant person (being one falling within section 3 and 8 of The Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017). Broadly, a relevant person will include an independent legal professional, financial institutions, auditors, estate agents, auction platforms etc. 

Once the information has been verified the relevant person will need to confirm to the  Companies House Registrar that it has completed verification in accordance with the new Act and regulations and provide a  statement complying with Part 2 (5) of The Register of Overseas Entities (VPI) Regulations 2022.  If the relevant entity has made no relevant dispositions  between 28 February 2022 and the date the application is made, the application must state this.

The information itself is to be retained by the relevant person for a period of 5 years.

What happens once registration is accepted?

Companies House will then publish the identity on a public register and assign a unique Overseas Entity ID. The name of the relevant entity and their agent will be available to the public on the Companies House website. The Overseas Entity ID will be required by the Land Registry before it registers any dealings with real estate in England & Wales.

The 2022 Act requires registered entities to update their information annually.

Secondary legislation allows individuals to be able to protect some of their information from public disclosure in limited circumstances (if it can be shown an individual or the people they reside with will be at serious risk of violence or intimidation).

Failure to comply with registration and/or within the time limits imposed?

In England and Wales a person guilty of an offence is liable on summary conviction to a daily fine of up to £2,500 or unlimited fines and a prison sentence of up to 5 years. Failure to register will also prevent any dealings with the real estate in question.

What can we do to help you?

We appreciate the above information is a bit of a mine-field especially as we are expecting further amendments to the legislation in the next few weeks.

We can keep you up to date of the latest developments, assist and advise you on your obligations and aid in collecting the required information. If you require, we can also verify the required information for you and make the application for registration to Companies House and communicate the unique Overseas Entity ID number to you as well as process annual returns.

Additional information

If you have any questions and/or would like advice on the UK public register of beneficial ownership of overseas entities, please speak to Kuldip Matharoo in the Dixcart office in the UK: advice.uk@dixcart.com

Why Everyone is Talking about the Portuguese D7 Visa or Digital Nomad Visa

Portugal, a country with the oldest borders in Europe, is easily accessible in terms of travel to and from the rest of the world, which makes it a very popular destination. The archipelagos of the Azores and Madeira are autonomous regions of Portugal and, like the mainland, offer amazing weather, a relaxed lifestyle, superb cuisine, excellent wines, and stunning scenery.

The Portugal D7 Visa, which is often called the Digital Nomad Visa or Passive Income Visa, is a good residence option for non-EU citizens who want to live in Portugal, such as digital nomads.

The D7 Visa is also an excellent option for pensioners who have sufficient passive foreign income to support themselves. This income can be, for example, from: property rentals, financial investments, profits and dividends from a company, salaries, pensions, etc.

What do you need to do to apply for the D7 Visa?

STEP 1

The first step is to obtain a Portuguese tax number and open a bank account at a Portuguese bank. Once the bank account has been opened, you need to deposit a minimum amount of funds, as set out below:

  • If you are applying on your own, you need to deposit EUR 8,460 per year, or more; OR
  • If you are applying as a couple, you need to deposit EUR 12,690 per year, or more.

This is a low minimum income requirement, and if you can prove that your income is above this amount, your D7 Visa application has a better chance of being successful.

STEP 2

The second step is to secure long-term accommodation in Portugal. This includes either buying a property (no minimum amount required on the price), or renting a property for at least 12 months.

STEP 3

The third step is to submit an online application for an interview with the Portuguese Consulate, in your country of residence. 

After the Portuguese Consulate has concluded the analysis of your application and the documents submitted, they will issue a Visa which is valid for 4 months, and will allow you to travel to Portugal (two entries into the country), to submit your residence permit application to the Portuguese Immigration authorities(SEF).

SEF will analyse the application and then issue the D7 Visa, which will be valid for 2 years. During those 2 years, you need to stay in Portugal for at least 6 consecutive months or 8 intermittent months, per year.

If you continue to meet all the requirements, your D7 Visa will be renewable for another 3 years.

Other advantages of a D7 Visa

  • Ability to obtain Non-Habitual Resident Status (NHR) for 10 years – this  includes exemption from tax on certain foreign income if specific requirements are met
  • Permanent Visa Free entry and circulation in the Schengen Area, for up to 90 days out of any 180 days
  • Family reunification
  • Access to Educational institutions (including those teaching in English, French and German)
  • Ability to work as an independent professional or as an employee
  • Access to the Portuguese Health care system (SNS)
  • After a period of 5 years, being able to apply for permanent residence or Portuguese citizenship.

What is the Difference between a Golden Visa and a D7 Visa?

There are two major differences between the Golden Visa and D7 Visa.

The first difference is that the Golden Visa requires a significant investment when compared to the D7 Visa.

In addition, the minimum stay requirements are very different: with a D7 Visa, the applicant cannot be outside of Portugal for more than 6 consecutive months or 8 intermittent months, in any one calendar year, whereas with a Golden Visa only 7 days a year, on average, is required to be spent in Portugal.

Why Should You Reach out To Dixcart?

There is extensive information available on the internet that may assist you in obtaining the D7 Visa program yourself, however, the truth is that this may come with many hurdles that our team are familiar with and that may be easily avoided with the help of a professional.

In addition, more than just a Visa is required when relocating to Portugal. Dixcart can provide tax planning, among other services, that can assist when relocating. Tax planning is considered necessary before your actual move to Portugal, as arriving unprepared may result in unfavourable tax consequences that could have easily been avoided.

Additional Information

Please contact Lionel de Freitas at the Dixcart office in Portugal at: advice.portugal@dixcart.com, for additional information. 

Malta Charitable Foundations: The Law, Establishment, and Taxation Advantages

In 2007, Malta enacted specific legislation regarding foundations. Subsequent legislation was introduced, regulating the taxation of foundations, and this further enhanced Malta as a jurisdiction for foundations designed for charitable and private purposes.

The Objects of a foundation may be charitable (non-profit), or non-charitable (purpose) and may benefit one or more persons or a class of persons (private foundation). The Objects must be; reasonable, specific, possible, and must not be unlawful, against public policy or immoral. A foundation is prohibited from trading or carrying on commercial activities, but it may own commercial property or a shareholding in a profit-making company.

Foundations and the Law

Despite the relatively recent implementation of the law on foundations, Malta enjoys an established jurisprudence relating to foundations, where the Courts have dealt with foundations set up for public purposes.

Under Maltese law, a foundation may be set up by natural or legal persons, whether Maltese resident or not, irrespective of their domicile.

Two main types of foundation are recognised by the law:

  • The Public Foundation

A public foundation may be set up for a purpose, as long as it is a lawful purpose.

  • The Private Foundation

A private foundation is a fund endowed to benefit one or more persons or a class of persons (the Beneficiaries). It becomes autonomous and acquires the status of a legal person when it is formed in the manner prescribed by law.

Foundations may be set up either during a person’s lifetime or as specified in a will, on that person’s death.

Registration

The law provides that the foundation must be constituted in writing, via public deed ‘inter vivos’, or by a public or secret will. The written act must include detailed provisions containing the powers and signing rights.

The setting up of a foundation involves the registration of the foundation Deed, with the Office for the Registrar of Legal Persons, through which it gains a separate legal personality. The foundation itself is, therefore, the owner of the foundation property, which is transferred to the foundation through an endowment.

Registration and Voluntary Organisations

For voluntary organisations in Malta, there is a further registration procedure which must be fulfilled.

A voluntary organisation must fulfil the following conditions to be eligible for registration:

  • Established by a written instrument;
  • Established for a lawful purpose: a social purpose or any other lawful purpose;
  • Non-profit making;
  • Voluntary; 
  • Independent of the State.

The law also establishes a procedure for enrolling Voluntary Organisations in a Register of Voluntary Organisations. Enrolment requires the fulfilment of several requirements, including the submission of annual accounts and identification of the organisation’s administrators.

The Benefits of Enrolling a Voluntary Organisation

Any organisation that fulfils the above criteria is designated as a Voluntary Organisation. Enrolment, however, confers essential advantages to the organisation, including:

  • Can be created by foreigners, hold foreign assets and distribute dividends to foreign Beneficiaries;
  • Can receive or be the beneficiary of grants, sponsorships, or other financial aid from the Maltese Government or any entity controlled by the Maltese Government or the Voluntary Organisations Fund;
  • Founders do not need to be featured in any public records;
  • Ability to benefit from policies supporting voluntary action, as may be developed by the Government;
  • Details relating to the Beneficiaries, are protected by law;
  • Receiving or benefitting from exemptions, privileges, or other entitlements in terms of any law;
  • Being party to contracts and other engagements, whether remunerated or not, for carrying out services to achieve its social purpose, at the Government’s request or the request of an entity controlled by the Government.

The formation and enrolment of a Voluntary Organisation does not automatically give rise to a legal person. Voluntary Organisations have the option to register as legal persons but do not have the obligation to have to do so. Similarly, the registration of a Voluntary Organisation as a legal person, does not imply the enrolment of the organisation.

Setting up a Foundation

A public deed or a will can only constitute a foundation, if a ‘general act’ takes place to establish a foundation, it must be published by a public notary and subsequently registered in the Public Registry.

The minimum endowment of money or property to set up a foundation is €1,165 for a private foundation, or €233 for a public foundation established exclusively for a social purpose or as non-profit making, and must contain the following information:

  • The name of the foundation, which name must include in it the word ‘foundation’;
  • The registered address in Malta;
  • The purposes or Objects of the foundation;
  • The constitutive assets with which the foundation is formed;
  • The composition of the board of administrators, and if not yet appointed, the method of their appointment;
  • A local representative of the foundation is necessary, if the foundation administrators are non-Maltese residents;
  • Designated legal representation;
  • The term (length of time), for which the foundation is established.

A foundation is valid for a maximum term of one hundred (100) years from its establishment. Except when foundations are used as collective investment vehicles or in securitisation transactions.

Setting up a Non-Profit Organisation

Purpose foundations, also referred to as non-profit organisations, are regulated under Article 32, where one of the essential requirements  is an indication of the purpose of such a foundation.

This can subsequently be amended through an additional public deed. This may include supporting a class of persons within the community due to a social, physical, or other type of disability. Such an indication of support, will not render the foundation a private foundation, it will remain a purpose foundation.

The deed of foundation, for such an organisation, may indicate how its money or property will be used. It is at the administrators’ discretion whether or not to make such a specification.

As the foundation is explicitly being established for a particular purpose, if the purpose is; achieved, exhausted or becomes impossible to accomplish, the administrators must refer to the Foundation Deed, to determine how the remaining assets, left in the foundation should be treated.

Taxation of Malta Foundations and Non-Profit Organisations

In the case of foundations enrolled under the Voluntary Organisation Act as long as they are purpose foundations and are non-profit organisations, there are several options available:

  1. To be taxed as a company, such a decision is irrevocable; or
  2. To be taxed as purpose foundation and pay a capped rate of 30%, rather than 35% tax; or
  3. If the foundation has not opted to be taxed as a company or as a trust and does not qualify for the capped rate above, the foundation will be taxed as follows:
    • For every euro within the first €2,400: 15c
    • For every euro within the next €2,400: 20c
    • For every euro within the next €3,500: 30c
    • For every euro of the remainder: 35c

The relevant provisions will be applied to the Founder of the foundation and to the Beneficiaries.

How Can Dixcart Assist?

The Dixcart office in Malta can assist with the efficient establishment and management of a foundation to meet the agreed Objects.

Additional Information

For further information about Maltese foundations and the benefits that they offer, please speak to Jonathan Vassallo: advice.malta@dixcart.com at the Dixcart office in Malta. Alternatively, please speak to your usual Dixcart contact.

Europe’s New Favourite Business Gateway

2022 offers a spectrum of business opportunities for the world ahead and Madeira offers great potential – even more so for a small archipelago island in the Atlantic Ocean.

Putting Madeira on the map for ambitious entrepreneurs has never been as exciting as now – as the world moves to an environment where substance is of importance coupled with a minimum global tax rate, Madeira stands out as a winner.

Why does Madeira Benefit from a 5% Tax Rate Compared to the Rest of the World?

Madeira has been able to benefit from a taxation rate of 5%, with the approval of the European Commission, and is included in the OECD whitelist, as the purpose is to provide for the development and diversification of this small island economy. The International Centre of Madeira (IBC of Madeira), the jurisdiction which regulates Madeiran companies, has been formally approved by the European Commission as a State Aid Regime and thus is allowed to benefit from the low tax rate.

The 5% is particularly attractive since the rate is applicable until the end of the year 2027.

What sort of Companies Can Operate in MIBC in 2022?

2022 is adjusting quickly to new realities, with the tide turned against the pandemic, new themes and trends are quickly arising, providing new possibilities for business opportunities.  We provide below some examples of business ventures that may be undertaken in the island of Madeira, through the IBC:

  • Technology

Unlimited potential lies with the sort of companies that may be created in the technology space through the IBC of Madeira. Selling hardware and software products to international markets is of great interest.

Granular examples of these include; technology for the tracking of overseas shipments, cybersecurity products and/or services, technology for direct air capture which may be sold after development, the selling of 3D printed bone implants, selling of virtual influences, among other possibilities, plus the endless possibilities of housing services in an IBC for the metaverse.

In terms of future technology, the Madeiran IBC may be used; by companies developing  drones that will be used to monitor crops or perform delivery of foods, medicines, books and other items. It is worth pointing out that Madeira has a Technology college with young graduates which makes it convenient to employ a local workforce. This may be more cost effective for start-up operations sensitive to prices, due to the low costs of living in Madeira.

  • Trademarks

The underlying potential of earning income from a trademark is  never ending and varies widely – whether it is a word, phrase, symbol, design or a combination of things that identifies your brand, trademarks are a great way to earn income in a tax efficient way in the IBC of Madeira.

Companies may set up group structures whereby the operational and trading activities occur in the respective jurisdictions and these companies make a payment to the Madeiran company who owns the trademark. The income from the use of the trademark is then subject to the beneficial tax rate of 5%.

  • Telecoms

With a young population of educated Madeiran locals, setting up a call centre in the tropical island may be of interest. International companies, hotel, insurance or bank groups, among others, who require call centres, may set up their operations in the island and benefit from the lower tax rate for the income earned by the company for telecoms communication.

What makes this option very attractive is the fact that there are many young people in Madeira who are highly educated and able to speak more than two languages – English being one of them! Further to this, and as mentioned already, Madeira has a low basic salary (one of the lowest in Europe) – making it a feasible financial option for businesses. Lastly, Madeira shares the same time zone as London, one of the world’s most important financial districts – and it is therefore easier, from an operational point of view, to do business with the same time zone.

  • Media

Companies are rushing to win back customers post the pandemic. As more ads become digital, the benefit of having a Madeira IBC company to sell such digital advertisements may be very favourable. Other examples of companies that may be created in the IBC to earn income include; digital installations to generate data that may help companies hone their marketing, generating mobile ads and earning royalty income from photographs taken.

  • Entertainment

More drama is expected in the entertainment industry in 2022, as films are being released simultaneously on streaming services and cinemas – viewers are looking for entertainment post the pandemic. Creating production in Madeira is a great way of making use of the island’s natural beauty, not even mentioning the stunning ‘levadas’ – whether you are a TikTok influencer earning income from advertising roles or a producer wishing to provide services from Madeira or creating content in Madeira, the 5% income tax regime may be deemed highly beneficial.

As the gaming industry continues to experience tailwind, with talk around the Metaverse becoming more and more of interest, netizens can work, shop and play. The creation and sale of gaming products through the right to explore may be done through an IBC company of Madeira, and may be of particular interest with a high number of qualified graduates from the Madeira Technology University.

  • Retail

Trading is one of the most popular options for a Madeira IBC. Typical structures include the exporting of goods from one place and importing to the next place, with the trading operations occurring in an IBC of Madeira. With online businesses on the rise, this form of trading is proving to be more and more popular.

  • Food and Farming

As the world expands rapidly with a growing population and a shortage of food, the Madeira IBC may be used to recycle food. It is known that millions of tonnes of food is wasted a year. Start-ups are racing to rectify this issue by creating upcycled food by using bits of food that fall through the cracks of the food system in order to create something new. Using a Madeira company to sell such systems may be of particular interest and may be seen as a gateway into the European market to achieve this objective.

What Substance is Required to Incorporate an IBC company in Madeira?

Please refer to the article: Three Types of Portuguese Company Advantages and Criteria for more details of the related substance criteria to establish a company in the island of Madeira.

How May Dixcart Help?

Operating in Madeira since the late 1980s, Dixcart was one of the first company service providers on the island, to assist businesses to establish within the IBC. We continue to have an office in Madeira and have subsequently also opened an office on the Portuguese mainland, in Lisbon.

Please reach out to our specialists to find out more should you have any questions: advice.portugal@dixcart.com

UK Tax Authority (HMRC) ‘Nudge’ Letters

As the UK tax authority (‘HMRC’), are returning to normal operations, they are revising their approach to encourage compliance. HMRC have at their disposal vast pools of information from overseas jurisdictions, from Companies House and from the Land Registry. They are using this data to subtly push people towards compliance, which is why they are called ‘nudge’ letters. The letter is designed to prompt or nudge the taxpayer into reviewing their tax returns and finances to determine whether further income or gains need to be notified to HMRC.

HMRC has recently issued ‘nudge’ letters to UK taxpayers who it believes hold crypto assets. The letter advises them that Capital Gains Tax issues can arise on any gains realised from the sale, or deemed disposal, of crypto assets. This can include the outright sale of crypto assets for cash, exchanging one crypto asset for another or using crypto assets to acquire goods or services.

What should you do if you get a ‘nudge’ letter?

It is important to undertake a thorough review of your sources of income and gains to consider if your filings are correct and complete. If you are sure that everything is in order, you can respond to HMRC to this effect.

The HMRC ‘nudge’ letter asks the individual to sign and complete a ‘certificate of tax position’ declaration. This includes a confirmation of understanding that a false declaration is a criminal offence and can result in an investigation or even criminal prosecution. There is no legal obligation on the taxpayer to sign the declaration and if your affairs are in order it may be best to respond to HMRC by letter rather than with the ‘certificate of tax position’ provided.

If you have overlooked a source of income or gain, then this will need to be corrected as soon as possible. Different disclosure routes are available depending on the individual’s circumstances and one such route is via the Digital Disclosure Service (DDS).

How We Can Help

It is advisable for the individual to seek specialist tax advise on receipt of a HMRC ‘nudge’ letter.

Our tax team, in the UK office, can help you review your tax position and can respond to HMRC and confirm what action, if any, will need to be taken to resolve the matter. In our experience, getting the strategy right to resolve the enquiry, in the most cost-effective way, is the key to minimising any potential damage.

For more information, please contact Paul Webb or Karen Dyerson at the Dixcart office in the UK: advice@dixcartuk.com as soon as possible to discuss the position.

Posted in Tax

Planning for a Superyacht? Here is What you Need to Consider (1 of 2)

When you or your client think about their new Superyacht it might conjure visions of luxurious relaxation, crystal clear blue waters and basking in the sun; conversely, I highly doubt the first thing that comes to mind is the need to meticulously plan for the tax and management implications that go hand in hand with such a prestigious asset.

Here at Dixcart, we wanted to create some helpful and informative articles to serve as easy to digest introductions to some key concepts for superyacht planning:

  1. The key considerations for Superyacht ownership; and,
  2. A closer look at the ownership structure, Flag, VAT and other considerations via working case studies.

In article 1 of 2, we’ll take a brief look at vital elements such as:

What Holding Structures Should I Consider For a Superyacht?

When considering the most effective ownership structure you must take into account not only direct and indirect taxation, but also mitigation of personal liability. 

One way of managing this position is through the establishment of a corporate entity, which acts as a holding structure, owning the vessel on the Beneficial Owner’s behalf.

The tax planning requirements and available structures will help define desirable jurisdictions. The entity will be subject to the local laws and tax regime, therefore modern offshore jurisdictions like the Isle of Man may provide tax neutral and globally compliant solutions.

The Isle of Man offers a wide variety of structures to the Ultimate Beneficial Owner (UBO) and their advisers; such as Private Limited Companies and Limited Partnerships. As noted, the form of structuring is generally determined by the client’s circumstances and objectives, e.g.:

  • The vessel’s intended use i.e. private or commercial
  • The UBO’s tax position

Due to their relative simplicity and flexibility, Limited Partnerships (LP) or Private Limited Companies (Private Co) are commonly elected. Typically, the LP is operated by a Special Purpose Vehicle (SPV) – often a Private Co.

Yacht Ownership and Limited Partnerships

LPs formed on the Isle of Man are governed by the Partnership Act 1909. The LP is an incorporated entity with limited liability and can apply for separate legal personality at outset under the Limited Partnership (Legal Personality) Act 2011.

An LP consists of at least one General Partner and one Limited Partner.  Management is vested in the General Partner, who engages in the activity carried out by the LP i.e. the day-to-day management and any requisite decision making etc. Importantly the General Partner has unlimited liability, and therefore is liable to the full extent of all burdens and obligations incurred. For this reason the General Partner would usually be a Private Co.   

The Limited Partner provides the capital held by the LP – in this instance, the method of financing the yacht (debt or equity). The Limited Partner’s liability is limited to the extent of their contribution to the LP. It is of vital importance that the Limited Partner does not participate in the active management of the LP, lest they be deemed a General Partner – losing their limited liability and potentially defeating the tax planning, leading to unintended tax consequences.

The LP must have an Isle of Man Registered Office at all times. You can read more about what a Registered Office is, here.

The General Partner would be a Special Purpose Vehicle (“SPV”) taking the form of a Private Co managed by the service provider – for example, Dixcart would establish an Isle of Man Private Limited Company as General Partner with Isle of Man Directors, and the Limited Partner would be the UBO.

Yacht Ownership and SPVs

It may be useful to define what we mean when we say SPV. A Special Purpose Vehicle (SPV) is a legal entity established to achieve a defined purpose, normally incorporated to ringfence risk – be it legal or fiscal liability. This can be to raise financing, conduct a transaction, manage investment or in our instance, act as General Partner.

The SPV would arrange any matters required for the effective and efficient management of the yacht; including the provision of financing where appropriate. For example, instructing the build, purchase of tenders, working with various third-party experts to crew, manage and undertake maintenance of the Yacht etc.

If the Isle of Man is the most appropriate jurisdiction of incorporation, there are two types of Private Co available – these are Companies Act 1931 and Companies Act 2006 companies.

Companies Act 1931 (CA 1931):

The CA 1931 company is a more traditional entity, requiring Registered Office, two Directors and a Company Secretary.

Companies Act 2006 (CA 2006):

By comparison the CA 2006 company is more administratively streamlined, requiring Registered Office, a single Director (which can be a corporate entity) and a Registered Agent.

You can read more about what the role of Registered Office and Registered Agent are here.

Since 2021, CA 2006 companies can re-register under the CA1931 Act, whereas the inverse was always possible since the commencement of the CA 2006 – thus, both types of Private Co are convertible. You can read more about re-registration here.

We tend to see the CA 2006 route elected by most yachting structures, due to the relative simplicity offered. However, the choice of corporate vehicle will be governed by the planning requirements and the objectives of the UBO.

Where Should I Register The Superyacht?

By registering the vessel to one of the many shipping registries available, the owner is choosing whose laws and jurisdiction they will sail under. This choice will also govern the requirements regarding the regulation and inspection of the vessel.

Certain registries offer more developed tax and registration procedures, and the jurisdiction may also offer various legal and tax benefits. For these reasons, the British Red Ensign is often the flag of choice – available through Commonwealth countries, including:

In addition to Cayman and Manx registrations, we tend to also see clients favour the Marshall Islands and Malta. All four of these jurisdictions offer administrative benefits, modern legislative environments and are compliant with the Paris Memorandum of Understanding on Port State Control – an international agreement between 27 Maritime Authorities.

The choice of flag should again be determined by the UBO’s objectives and how the boat is intended to be used.

What Are The Implications For The Import/Export of a Superyacht?

Depending on a mix of factors relating to ownership and registration etc. sailing between territorial waters will often require serious consideration. There can be significant Customs Duties due, in mishandled circumstances.

For example, non-EU yachts must be imported into the EU and are subject to full rate VAT on the value of the yacht, unless an exemption or procedure can be applied. This can present significant costs for the owner of a superyacht, now potentially liable for up to 20%+ of the yacht value, at the time of importation.

As noted above, with proper planning, procedures can be applied which can abate or extinguish this liability. To name a few:

VAT Procedures for Private Charter Yachts

Temporary Admission (TA) – Private Yachts

TA is an EU Customs procedure, which allows certain goods (including private Yachts) to be brought into the Customs Territory with total or partial relief from import duties and taxes, subject to conditions. This can provide up to 18 months of exemption from such taxes.

In brief:

  • Those non-EU vessels must be registered outside of the EU (e.g. Cayman Islands, Isle of Man or Marshall Islands etc.);
  • The legal owner must be non-EU (e.g. an Isle of Man LP and Private Co etc.); and
  • The individual operating the vessel must be non-EU (i.e. the UBO is not an EU citizen). 

You can read more about TA here.

VAT Procedures for Commercial Charter Yachts

French Commercial Exemption (FCE)

The FCE procedure allows commercial yachts operating in French territorial waters to benefit from VAT exemption.

In order to benefit from the FCE, the yacht needs to comply with 5 requirements:

  1. Registered as a commercial yacht
  2. Used for commercial purposes
  3. Have a permanent crew onboard
  4. The vessel must be 15m+ in Length
  5. At least 70% of charters must be conducted outside of French Territorial Waters:
    • Qualifying voyages include those cruises outside of French and EU waters, for example: a trip starts from another EU or non-EU territory, or where the yacht cruises in international waters, or starts or ends in France or Monaco via international waters.

Those that meet the qualifying criteria can benefit from VAT exemption on importation (normally calculated on the value of the hull), no VAT on the purchase of supplies and services for the purposes of trading commercially, including no VAT on the purchase of fuel.

As you can see, whilst beneficial, the FCE can be operationally complex, particularly with regard to complying with point 5. A “non exemption” alternative is the French Reverse Charge Scheme (FRCS).

French Reverse Charge Scheme (FRCS)

Article 194 of the EU Directive on the Common System of Value Added Tax was brought into force to reduce the administrative VAT burden of both the EU Member States and non-established persons doing business in EU member states. Due to the discretion afforded with regards to implementation, the French Authorities were able to extend this Directive to offer non-established entities certain VAT benefits via the implementation of the FRCS.

Whilst EU entities must make 4 importations in a 12 month period, to be eligible for the FRCS, non-EU entities (such as incorporated Isle of Man LPs) do not need to meet this criterium. They will however still need to engage a French VAT agent to assist with the local administrative duties and formalities.

No VAT will be payable on the hull importation under the FRCS, and as such will not require disbursement. Albeit, VAT on goods and services will still be payable, but can be reclaimed later. Therefore, correct application of the FRCS can provide a cashflow neutral VAT solution. 

Once the FRC importation has been completed and the yacht has been imported into France, the yacht is granted free-circulation and can operate commercially within any EU territory without restriction.

As you can see, due to the formalities and potential tax liabilities at stake, importation needs to be carefully planned and Dixcart work with specialist partners to ensure proper compliance with formalities.

Crewing Considerations

It is common for the crew to be employed via a third-party agency. Under such circumstances, the third-party agency will hold a crewing agreement with the owning entity (i.e. the LP). The agency will be responsible for vetting and supplying crew members of every level of seniority and discipline – from Captain to Deckhand. They will work alongside service providers like Dixcart to ensure the best possible experience for the UBO and their guests.

How Dixcart can Support your Superyacht Planning

Over the last 50 years, Dixcart has developed strong working relationships with some of the yachting industry’s leading experts – from tax and legal planning, to building, yacht management and crewing.

When combined with our extensive experience in the effective and efficient operation of corporate entities, registration and administration of yacht structures, we are well placed to assist with superyachts of all sizes and purposes.

Get in Touch

If you require further information regarding yacht structuring and how we can assist, please feel free to get in touch with Paul Harvey at Dixcart.

Alternatively, you can connect with Paul on LinkedIn

Dixcart Management (IOM) Limited is licensed by the Isle of Man Financial Services Authority.

Guernsey – Tax Efficiencies for Individuals, Companies and Funds

Background

Guernsey is a premier international financial centre with an enviable reputation and excellent standards. The Island is also one of the leading jurisdictions providing international corporate and private client services and has developed as a base from which internationally mobile families can organise their worldwide affairs through family office arrangements.

The island of Guernsey is the second largest of the Channel Islands, which are situated in the English Channel close to the French coast of Normandy. Guernsey combines many of the reassuring elements of UK culture with the benefits of living abroad. It is independent from the UK and has its own democratically elected parliament which controls the Island’s laws, budget and levels of taxation.

Taxation of Individuals in Guernsey 

For Guernsey income tax purposes an individual is; ‘resident’, ‘solely resident’ or ‘principally resident’ in Guernsey. The definitions relate primarily to the number of days spent in Guernsey during a tax year and, in many cases, also relate to the days spent in Guernsey in several preceding years, please contact: advice.guernsey@dixcart.com for further information.

Guernsey has its own system of taxation for residents. Individuals have a tax-free allowance of £12,175. Income tax is levied on income in excess of this amount at a rate of 20%, with generous allowances.

‘Principally resident’ and ‘solely resident’ individuals are liable to Guernsey income tax on their worldwide income.

Attractive Tax Caps

There are a number of attractive features of the Guernsey personal taxation regime:

  • ‘Resident only’ individuals are taxed on their worldwide income, or they can elect to be taxed on their Guernsey source income only and pay a standard annual charge of £40,000.
  • Guernsey residents falling under any one of the three residence categories, detailed above, can pay 20% tax on Guernsey source income and cap the liability on non-Guernsey source income at a maximum of £130,000 per annum OR cap the liability on worldwide income at a maximum £260,000 per annum.
  • New residents to Guernsey, who purchase an ‘open market’ property, can enjoy a tax cap of £50,000 per annum on Guernsey source income in the year of arrival and the subsequent three years, as long as the amount of Document Duty paid, in relation to the house purchase, is at least £50,000.

Additional Benefits of the Guernsey Tax Regime

The following taxes are not applicable in Guernsey:

  • No capital gains taxes.
  • No wealth taxes.
  • No inheritance, estate or gift taxes.
  • No VAT or sales taxes.

Immigration to Guernsey

The Dixcart Information Note: Moving to Guernsey – The Benefits and Tax Efficiencies contains additional information about moving to Guernsey. Please contact the Guernsey office if you have any specific questions or require any additional information regarding immigrating to Guernsey: advice.guernsey@dixcart.com

Taxation of Companies and Funds in Guernsey

What are the Advantages Available to Guernsey Companies and Funds?

  • A key advantage for companies registered in Guernsey, is a ‘general’ corporate tax rate of zero.

There are a number of additional advantages:

  • The Companies (Guernsey) Law 2008, the Trusts (Guernsey) Law 2007 and the Foundations (Guernsey) Law 2012, reflect Guernsey’s commitment to providing a modern statutory basis and increased flexibility for companies and individuals using the jurisdiction of Guernsey. The laws also reflect the importance placed on corporate governance.
  • Guernsey’s Economic Substance regime was approved by the EU Code of Conduct Group and endorsed by the OECD Forum on Harmful Tax Practices, in 2019.
  • Guernsey is home to more non-UK entities listed on the LSE markets than any other jurisdiction globally. LSE data shows that at the end of December 2020 there were 102 Guernsey-incorporated entities listed across its various markets.
  • Legislative and fiscal independence mean that the Island responds quickly to the needs of business. In addition the continuity achieved through the democratically elected parliament, without political parties, helps deliver political and economic stability.
  • Located in Guernsey, there are a wide range of internationally respected business sectors: banking, fund management and administration, investment, insurance and fiduciary. To meet the needs of these professional sectors, a highly skilled workforce has developed in Guernsey.
  • 2REG, the Guernsey aviation registry offers a number of tax and commercial efficiencies for the registration of private and, off-lease, commercial aircraft.

Formation of Companies in Guernsey

A few key points are detailed below, outlining the formation and regulation of companies in Guernsey, as embodied in the Companies (Guernsey) Law 2008.

  1. Incorporation

Incorporation can normally be effected within twenty four hours.

  • Directors/Company Secretary

The minimum number of directors is one. There are no residency requirements for either directors or secretaries.

  • Registered Office/Registered Agent

The registered office must be in Guernsey. A registered agent needs to be appointed, and must be licensed by the Guernsey Financial Services Commission.

  • Annual Validation

Each Guernsey company must complete an Annual Validation, disclosing information as at 31st December of each year. The Annual Validation must be delivered to the Registry by 31st January of the following year.

  • Accounts

There is no requirement to file accounts. However, proper books of account must be maintained and sufficient records must be kept in Guernsey to ascertain the financial position of the company at no greater than six monthly intervals.

Taxation of Guernsey Companies and Funds

Resident companies and funds are liable to tax on their worldwide income. Non-resident companies are subject to Guernsey tax on their Guernsey-source income.

  • Companies pay income tax at the current standard rate of 0% on taxable income.

Income derived from certain businesses, however, may be taxable at a 10% or 20% rate.

Details of Businesses Where a 10% or 20% Corporate Tax Rate is Applicable

Income derived from the following types of business, is taxable at 10%:

  • Banking business.
  • Domestic insurance business.
  • Insurance intermediary business.
  • Insurance management business.
  • Custody services business.
  • Licensed fund administration business.
  • Regulated investment management services to individual clients (excluding collective investment schemes).
  • Operating an investment exchange.
  • Compliance and other related activities provided to regulated financial services businesses.
  • Operating an aircraft registry.

Income derived from the exploitation of property located in Guernsey or received by a publicly regulated utility company, is subject to tax at the higher rate of 20%.

In addition, income from retail businesses carried out in Guernsey, where taxable profits exceed £500,000, and income from the importation and/or supply of hydrocarbon oil and gas are also taxed at 20%. Finally, income derived from the cultivation of cannabis plants and income from the use of those cannabis plants and/or licensed production of controlled drugs is taxable at 20%.

Further Information

For additional information regarding personal relocation, or the establishment or migration of a company to Guernsey, please contact the Dixcart office in Guernsey: advice.guernsey@dixcart.com

Dixcart Trust Corporation Limited, Guernsey: Full Fiduciary Licence granted by the Guernsey Financial Services Commission.

Dixcart Fund Administrators (Guernsey) Limited: Protection of Investors Licence granted by the Guernsey Financial Services Commission

Nevis Trusts: The Logical Choice for Asset Protection Structures

The most commonly found type of Trust in an offshore jurisdiction is the Common Law Trust, which is usually Discretionary in nature. This is an incredibly useful tool for estate planning and whilst there is the option to establish a standard Common Law Trust in Nevis, there is also an additional unique and beneficial option for asset protection purposes, known as the Nevis International Exempt Trust.

What Added Asset Protection Does a Nevis International Exempt Trust Offer?

Typically, a Settlor is looking for a safe and stable jurisdiction to maintain their assets with a potential additional consideration to seek to protect the Trust Property from future litigants, who may attack the Trust in the hope of setting it aside in order to have access to the Trust Fund.

An attempt to attack a Trust could come from an array of complainants such as; a disgruntled Beneficiary, a divorcing spouse or a future creditor.

In the case of a Nevis International Exempt Trust, the Law states that:

  • A creditor must first pay a bond of US$100,000 to the Minister of Finance in Nevis, before bringing any action or proceeding against a Trust and before the Court will consider it.
  • The burden of proof is placed completely on the complainant who must establish their claim “beyond reasonable doubt.”
  • No action or proceeding to set aside the settlement or by any person claiming to have had an interest in assets before they were settled in a Trust will be entertained by the Court if the action or proceeding commences two years after the settlement of the Trust or the settlement of the property.

These unique aspects of the Nevis Trust legislation combined with ensuring that the goals and intentions of the Trust are discussed with the Trustee at the outset, the three certainties are clearly in place, and that the Deed is properly drafted on establishment, will provide the Trust with a high level of protection against any potential attack and produce a robust asset protection structure to suit the Settlor’s needs.

How to Help Ensure that a Nevis Trust is Set Up Correctly

Further information to help ensure that a Trust is set up correctly can be found in the following Dixcart Article:

Nevis International Exempt Trusts – Trust Creation and Practical Uses for Estate and Succession Planning

Criteria to Qualify as a Nevis International Exempt Trust

In order to be classified as a Nevis International Exempt Trust, the Trust must meet the following criteria:

  • At least one of the Trustees must be a Trust Company e.g. Dixcart Management Nevis Limited, licensed by the Government to undertake trust business in Nevis, or a corporation incorporated under the Nevis Business Corporation Ordinance (commonly known as a Nevis IBC); and
  • The Settlor and Beneficiaries must at all times be non-residents of Nevis; and
  • The trust property must not include any land in the Federation of St. Kitts and Nevis.

In conclusion, by selecting a Nevis International Exempt Trust as your estate planning vehicle to protect your assets and pass them on to future generations, you are afforded additional protective benefits to that of a Common Law Trust found in other offshore jurisdictions.

Additional Information

If you require any further information about Nevis Trusts and the advantages that they offer, please contact Beth Le Cheminant at: advice.nevis@dixcart.com.

Non-UK Domiciled Individuals – the Importance of Pre-arrival UK Tax Planning

Introduction

Due to the impact it can have on an individual’s UK tax liability, it is vital that domicile is fully understood by those wishing to relocate to the UK permanently.

In general terms, if a non-domiciled individual wishes to move to the UK permanently and has no intention to return to their previous country, then there is a strong case they will be considered UK domiciled for tax purposes.

Effective tax planning, pre-UK arrival is therefore critical to avoid potential costly surprises in the future.

UK Domiciled vs Non-domiciled Impact

Firstly, let us briefly look at the UK tax implications for a person who is UK domiciled versus non-domiciled. Please note that both individuals are UK tax resident in the year for this illustration.

Mr UK Domiciled

  • Liable to tax on worldwide income and gains
  • Worldwide assets are subject to UK inheritance tax

Miss Non-domiciled

  • Worldwide income and gains are taxable on the arising basis
  • A claim for the remittance basis can be made which will mean Miss Non-domiciled will only be taxed on her foreign income and gains if she remits it to the UK. If it is kept offshore, she will not be subject to UK tax
  • Non-UK situs assets are excluded from UK inheritance tax

From this, we can see that Miss Non-domiciled position is usually more advantageous from a UK tax perspective. 

Determining your Domicile

In establishing whether a new domicile of choice has been created, careful consideration must be taken for the following points before making a decision to move to the UK:

  • the intentions of the individual;
  • their permanent residence;
  • their business interests;
  • their social and family interests;
  • ownership of property; and
  • the form of any Will that they have made.

This list is by no means exhaustive and there is no single criteria which determines whether an individual is or is not domiciled in the UK. Instead, a ‘balance of probabilities’ approach is taken.

Defend your Domicile

Taking into account the above, it is therefore essential to have provisions in place before arriving in the UK, to defend any potential challenge from HMRC.

Domicile enquires can be lengthy and intrusive should HMRC doubt an individual’s non-domicile claim. This can involve months or even years of correspondence involving various questions into; background, lifestyle and family and social connections, both from a historic perspective and to establish future intentions.   

Acquiring and maintaining evidence of strong, ongoing links to the country of domicile is crucial for those claiming non-domiciled status, and so is evidence of an intention to leave the UK at a future date. This can be particularly problematic on death, potentially bringing a foreign estate within the scope of UK inheritance tax.

To avoid any hiccups in the future, it may be worth considering having a domicile statement prepared, to provide contemporaneous evidence supporting the claim . 

Case Law

IRC v Bullock: Mr Bullock had a domicile of origin in Nova Scotia. He lived in England for 40 years. His wife did not want to live in Nova Scotia. Mr Bullock hoped to return there should he persuade his wife to change her mind or should he survive her. It was held by the Courts that he had a real determination to return rather than a vague aspiration. Accordingly he retained his Nova Scotian domicile of origin and had not acquired an English domicile of choice.

In contrast:

Furse v IRC: Mr Furse expressed a wish to live in England for the rest of his life save only for a contingency that he would return to the USA, should he cease to be physically able to take an active interest in his farm (situated in England). The Courts decided that this intention was so vague as to impose no limit on his intention to remain in England. Accordingly he had acquired an English domicile of choice.

Summary 

From the above we can see it is difficult to make a judgement without fully examining an individual’s position in detail.

An individual’s domicile status is a fundamental factor in determining his/her liability to UK tax. It also has implications for other branches of the law.

Due to HMRC’s increased number of investigations into the tax affairs of non-domiciled individuals, you should be prepared to present a robust defence in the event of any challenge from HMRC. A domicile statement can greatly assist, to provide evidence of an individual’s intentions, where it is supported by the facts, and can be particularly useful in situations where enquiries are opened by HMRC after death.

Additional Information

If you require additional information on this topic and further guidance regarding your domicile status, please contact your usual Dixcart adviser or speak to the Dixcart office in the UK: advice.uk@dixcart.com