Using an Isle of Man company?

[Liambow]

Hi guys,

I live in the UK and have my earnings paid directly to my limited company from Ireland (commissions from app sales). So none of my money is "earned", or paid to me from the UK. (I also pay no vat because of eu sales)

My question is simple - can I set up a limited company in the Isle of Man - and have the money paid directly from Ireland to the Isle of Man.

I would like to continue living in the UK - and pay tax only on the money I withdraw as wages from the Isle of Man company. Leaving the remaining (untouched) money in Isle of Man company, where there is no corporation tax.

I have no staff, and no real business, just earnings from app sales. I only use the limited company here to reduce my tax.

Does this sound possible?

The reason for this - apart from saving tax - my apps won't stay popular forever and I'd rather save as much money as I can for when they stop making money. Then I could live off the money saved from corporation tax for years.


I've tried talking to tax advisors / accountants about this - but being in a small town, none of them have the knowledge - so if you can even recommend someone/a company who would have an understanding of the subject - that would be great.


Thanks so much for any help!

Kind regards

L.

[GlobalTaxAdviser]

Hi

The problem with Isle of man and any other country is that you cannot run a company from the UK and not end up paying UK Tax on the profits unless of course you have a structure in place in that country where you have directors etc appointed (which is expensive) even then HMRC may catch you out as they will find out its an artificial setup. Th UK domestic laws and the various double tax treaties including the one with Isle of man and UK makes this perfectly clear you pay tax in the place of effective management and control.

If you want to avoid Corporation tax then you may have to move.

Kind Regards

GTA

[Liambow]

Thanks so much for the reply.

I had heard before that you had to live on the island to really get the benefits

I just figured - becuause the money was being earned by an Isle of Man company - and the money wasn't passing though the UK at all (direct Ireland to Isle of Man) the uk wouldn't be able to claim it was taxable.

Thanks again.