Private Client Services in Isle of Man

Trusts

The Isle of Man is at the forefront of best practice development in the area of trusts and was one of the first jurisdictions to introduce the regulation and supervision of trust companies. Professional trustees must be licensed under the Financial Services Act 2008 and are regulated by the Isle of Man Financial Services Authority (IOMFSA).

The Financial Services Act 2008 and the Financial Services Rulebook 2016, together with various pieces of secondary legislation, Codes and Practice Notes ensure that the Isle of Man’s regulatory regime continues to be compliant with international standards.

Foundations

The Isle of Man Foundations Act 2011 provides an alternative to more traditional Isle of Man trust structure, particularly for clients in non-common law jurisdictions. The uses of Isle of Man foundations include succession planning, charitable and philanthropic purposes, and asset holding vehicles (for example, commercial assets such as private jets) for non-charitable purposes. Sovereign can assist with all aspects of setting up and registering an Isle of Man Foundation and can act as a council member, an enforcer and a registered agent. Sovereign is also able to provide full administrative services enabling a Foundation to perform including the preparation of financial statements, accounts, the completion and filing of tax returns and the opening and maintaining of bank accounts.

Overseas Property Ownership, including UK

Sovereign assists many of its clients with the acquisition of real estate worldwide. We advise on tax and structuring and can manage the transaction process and financing arrangements. With our regional knowledge of property ownership laws and regulations, along with our tax planning expertise, we can help you reduce any potential exposure. Most people who own or intend to own property abroad will not be fully conversant with local legal procedures or taxes – stamp duties, municipal and wealth taxes – and may not fully recognise the longer term implications in terms of potential exposures to capital gains tax, inheritance tax or forced heirship rules. Substantial benefits may be derived through the use of corporate, trust or foundation structures to address these issues. Many property developers in the UK use Isle of Man structures.

Marine Services

The Isle of Man Register is a Category 1 British Red Ensign Register, which can register vessels of unlimited type and size. It is the flag of choice for many large shipping corporations operating all vessel types to very exacting standards. It currently has over 12m gross registered tonnes on its register, of which over 50% of vessels are tankers. The Isle of Man has a reputation for the quality and service provided by the Ship Registry team at very reasonable costs for the operator. It provides a 24/7 service to its operators and out-of-hours registration to suit clients’ needs.

The Isle of Man is also the flag of choice for the most prestigious of the world’s superyachts. A yacht is eligible to be registered on the island if it is a British ship – the majority interest in the yacht (at least 33/64 shares) must be owned by an Isle of Man company or a company incorporated in the UK, the EU or any British Dependent Territory, or a citizen of these jurisdictions. Foreign nationals may obtain the advantages of Manx registration by having their vessels owned by an Isle of Man company. Advantages of registering a yacht in the Isle of Man include:

No annual tonnage tax;

No income tax payable on charter profits;

Entitlement to the support of the UK government, including worldwide consular services;

No requirement to disclose details of the beneficial owners of the company at time of resignation;

If a vessel is owned by a company then all transfer taxes and re-registration charges can be avoided by simply effecting a transfer of shares in the company instead of changing ownership of the vessel;

A company is not subject to any charge to inheritance tax. If the shares of the company are held within a suitable trust then it is possible to protect against worldwide inheritance tax.

An EU-resident yacht owner wishing to keep a yacht in EU waters will be expected to demonstrate that VAT was originally paid on the yacht or that it has VAT-paid status. Use of an Isle of Man company can enable the VAT paid on the purchase of a yacht in certain circumstances to be reclaimed, whilst retaining the VAT-paid status of the yacht.

Gibraltar-based Sovereign Marine Services is the marine division of The Sovereign Group. It was formed in 2000 to provide marine corporate and administration services to yacht owners, as well as to maritime law firms, yacht managers and brokers and other professional firms involved in the yachting industry. RAY is able to assist with transfers to company ownership and all registration formalities. Initially established to register vessels under the British Red Ensign, RAY is now registering, administering and managing yachts – both pleasure and commercial – on a worldwide basis.

Aviation Services

RegisterAnAircraft.com (RANA) is the aviation division of The Sovereign Group. Combining the experience acquired over 20 years in the field of aircraft registration and offshore company management, RANA offers a complete range of professional and highly tailored services to aircraft owners and operators worldwide. An aircraft is only eligible for the Isle of Man Aircraft Registry (IOMAR) if it is for private or corporate use. To gain registration, all aircraft must be certified by the European Aviation Safety Authority (EASA) and also have a conforming Type Certificate.