Why are Family Offices Relocating to the Isle of Man?
Each Family Office is as unique as the Ultra-High-Net-Worth (UHNW) family it represents. This fact often necessitates a structure comprised of a network of private wealth and investment planning vehicles in multiple jurisdictions around the world, with a central office to co-ordinate operations and safeguard the family’s interests.
The massive growth in private wealth over recent decades has resulted in the establishment of a significant number of Family Offices globally.
But ‘Where is the best place to establish a Family Office?’. Choosing where the central Family Office is located can be a complex task but will primarily depend on the needs, geographical spreads and long-term objectives of the family.
In this short article, we highlight some of the reasons why Family Offices are being attracted to the Isle of Man and how Dixcart can support this trend.
Tax Environment
Where the Family Office is established will determine the applicable tax laws and regulations. Therefore, the choice of jurisdiction will not only affect the running costs of the Family Office itself but also impacts its ability to protect and grow wealth.
Though there may be applicable taxes where the assets or investments are located, certain income and gains can be managed efficiently where the Family Office is located in an appropriate jurisdiction. This can affect performance and return on investments.
The Isle of Man operates an attractive tax regime, offering headline rates such as:
- Corporate Tax @ 0% for most activity
- Income derived from Isle of Man land/property is taxed @ 20%
- No withholding tax on most dividend and interest payments
- Highest Rate of Personal Income Tax @ 21%
- Elective Personal Income Tax Cap Available @ £220,000 of Contribution
- 0% Capital Gains Tax
- 0% Inheritance Tax
Access to Talent
Whether it is the central or a branch office, Family Office’s activities rely on high calibre professionals from an increasingly diverse background. It is important to select a territory with access to a pool of highly qualified and experienced professionals, and the flexibility to bring specialist personnel in from outside the jurisdiction if necessary.
The chosen staff need more than just the technical know-how, they also need to be persons with a depth of experience and integrity, whom can be relied upon to promote the best interests of the family at all times.
The Isle of Man has a diverse economy with a long heritage in financial services. The population is made up of a large number of leading Legal, Accounting, Fiduciary, Tax and Compliance professionals, among others.
Infrastructure & Services
Wherever the Family Office is located, there should be robust infrastructure and significant professional services available to support the wealth management activities carried out – from banking to IT services and everything in between.
The Isle of Man offers Family Office’s and businesses a range of attractive features, including:
Infrastructure
- The Isle of Man is at the forefront of connectivity.
- Regular travel links to London, Dublin, Manchester, Bristol, Edinburgh, Belfast and more.
- A wide range of well-funded public services available on Island, including healthcare and public transport.
Professional Services
- All major UK banks have a presence on the Island, including Barclays, RBSI, HSBC, NatWest, Santander, etc.
- All big 4 accounting firms have a presence on the Island and a wide range of independent Tax Advisers on hand.
- A large number of legal services providers, offering Isle of Man Advocates that are often dual Isle of Man / UK qualified.
- Over 70 licensed and regulated Trust & Corporate Service Providers.
- A selection of local telecoms providers, IT services and data centres
- Investment Managers, Pension Administrators, Insurance companies and more.
Legal & Regulatory Regime
The Family Office must comply with the local laws and regulation where it is located. This will dictate aspects like the available structuring options, impact privacy and impose requirements such as reporting or licensing etc.
A robust regulatory environment is often regarded as a burden but can actually be an advantage for the effective operation of a Family Office. For instance, being linked with a globally compliant country will make transactions, banking and day-to-day administration more straightforward and reliable. Conversely, a less well-regulated jurisdiction can create operational difficulties.
The Isle of Man is an OECD whitelisted jurisdiction, placing it in a select group of leading nations for technical compliance in anti-money laundering measures.
The Island has no specific regulatory requirements relating to Family Offices per se and as such there is a high degree of freedom afforded in terms of its operation. Further, Isle of Man legal entities enjoy a high degree of privacy, and as such the family’s matters can remain confidential. In addition, Isle of Man law permits a wide variety of legal structures which can support all of the Family Office’s planning needs, including many variants of Trusts, Companies, Foundations and Partnerships.
The Island is a self-governing Crown Dependency that offers a modern Common Law regime that is distinct from that of the UK. The Island is politically stable and agnostic in its policymaking, meaning that it maintains a consistent blend of enduring business-friendly Legislation and reliable Case Law. As such the Isle of Man provides a natural home for almost any Family Office or business.
Dixcart’s Family Office Services
The Dixcart Group has itself been privately owned by the same family for over 50 years and is proudly independent. The Group has 8 offices in 7 leading jurisdictions, each of which can provide a core suite of Fiduciary services, and each having areas it particularly excels in.
Dixcart has been delivering bespoke services to Family Offices and HNWIs in the Isle of Man since 1989 and specialises in actioning Private Client planning and Corporate Structuring for clients and their advisers.
Our mix of private ownership, high proportion of senior professionals and quality over quantity approach to business makes Dixcart ideal for those looking to establish a Family Office in the Isle of Man for long-term success.
Get in Touch
Whether you are seeking to establish a new Family Office, a branch, or are looking at relocating, please always feel free to get in touch with Paul Harvey at Dixcart to discuss how we can assist: advice.iom@dixcart.com
Dixcart Management (IOM) Limited is Licensed by the Isle of Man Financial Services Authority
