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The Isle of Man Income Tax Divisions have updated Guidance Note 49

09 May 2017

The Isle of Man Income Tax Divisions have updated Guidance Note 49: Taxation of Distributions from Corporate Taxpayers. The updates are in response to the UK’s falling corporation tax rate and relate specifically to ‘box 3’ reserves. Box 3 contains profits that have been subject to foreign tax at a rate of 20% or more and Manx resident shareholders in receipt of distributions from this box will not suffer Manx income tax. For accounting periods ending on or after 6 April 2017, profits that have been subject to foreign tax at a rate of 19% or more can be included in box 3, ie reduced from 20%. This is good news for shareholders of Manx companies that are subject to UK corporation tax on some or all of their profits.

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