For many years, the Isle of Man has been a jurisdiction of choice through which investors purchase, hold, redevelop or trade in UK commercial property. The tax legislation relating to this asset class is complex and has changed a lot over the years, the perception generally being that the advantages once offered by ownership structuring using a non-UK entity are no-longer as appealing as they once were. Today there are still a number of highly persuasive reasons why individuals or corporate investors may wish to use an Isle of Man company to invest into UK commercial property. Robert Cattle, a manager in Equiom Isle of Man’s corporate and real estate team, sets out five reasons below:
VAT registration may be desired in order to reclaim input VAT. This can be arranged within a matter of days in the Isle of Man, which shares a reciprocal VAT agreement with the UK and repayments are usually made within a couple of weeks of returns being submitted, thus creating immediate cashflow benefits. Isle of Man Customs and Excise are straightforward to deal with and are happy to discuss potential scenarios. Equiom has, within its VAT team, varied and in-depth experience when it comes to Customs and Excise. The team is extremely knowledgeable in the area and can assist when it comes to purchasing and holding a property for investment purposes or trading in property.
2. Lenders like the Isle of Man
The Isle of Man has mature and well established creditor protection and insolvency laws which allow for lenders to enforce their security if required. Due to this, lenders are generally more than happy to lend to an Isle of Man company. This is particularly attractive to foreign clients looking to invest into the UK and wishing to finance their investment using bank lending. Equiom has a great deal of experience in concluding loan deals and can assist with the selection of a lender.
3. Legal and regulatory framework
A little known fact about the Isle of Man is that the jurisdiction has the oldest continuously operating parliament in the world, having been established since Viking times. It is the case, however, that present day legislation is largely based on UK law, which is a useful link between the two jurisdictions. In addition to this, clients are comforted by the robust nature of the legal system and stringent regulation of the financial services industry. Equiom has in-house legal support and connections with high quality external law firms in the Isle of Man, the UK and beyond who can assist with any aspect of property ownership.
Current travel restrictions notwithstanding, the Isle of Man is a short flight from central London and many other UK and Irish hubs, meaning it’s quick and easy to meet with providers, whether that be clients visiting us or us visiting them or the property itself. At Equiom, we pride ourselves on taking an active role in the management of real estate (and other assets) and our client company directors use their expertise and connections to add value to client relationships. Good corporate governance is central to everything we do and we really value face to face meetings (when possible!)
5. Centre of excellence for international clients
Financial service providers in the Isle of Man have a long tradition of doing business with international clients from a range of locations and tend to have an excellent understanding of their needs and requirements. For this reason, we are typically better suited to understand and meet the demands of clients than, for instance, a UK company formation agent, who would likely have little experience in dealing with commercial property.
Equiom is a leading provider of real estate ownership structuring and offers a ‘one stop shop’ for commercial property requirements, garnered through many years’ of experience. For further information relating to Isle of Man company structures for real estate investment, contact Robert Cattle.
This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact Equiom to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.