Isle of Man Drops Land Tax Proposals From Income Tax Bill

by Jason Gorringe, Tax-News.com, London

03 March 2005

It has been reported that the Isle of Man Treasury has decided to drop a proposed land disposal tax following concerns expressed by the property industry that the tax would have an adverse impact on the island’s housing market.

According to the Isle of Man Online, the decision means that Section Three of the Income Tax Amendment Bill 2005, entitled ‘Charge to Income Tax on Disposal of Land', will not be moved when the bill is presented in the House of Keys for its second reading next week.

The levy was initially aimed at taxing the profits of individuals whose main source of income is derived from renovating residential property and selling it on at a profit, whilst claiming that the house as their main residence.

However, commenting on the matter, Treasury Minister Alan Bell conceded that the initial wording of the legislation was improperly targeted, and announced that a review will be undertaken before any further action is considered.

“We have come to the conclusion that it would be appropriate at this time not to move section three, in relation to the taxation of property, so that section will not be moved at all and it will be taken out of the bill,” stated Mr Bell.

“We have been listening to what the private sector and some members have been saying, and there is a feeling that perhaps the legislation hasn't been as focused on the target groups within property dealings as we had originally anticipated,” he added.

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