i e AT 3 of 1970 INCOME TAX ACT 1970

Transcription

1 i e AT 3 of 1970 INCOME TAX ACT 1970

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3 Inome Tax At 1970 Index i e INCOME TAX ACT 1970 Index Setion Page Liability to Inome Tax 11 1 Imposition of inome tax A [Repealed] Inome on whih tax is payable A Temporary tax exemption for ertain industrial undertakings B Revoation of exemption in ases of abuse C Basis of assessment of inome from any offie or employment D and 2E [Repealed] F Payments in respet of expenses G Benefits in kind H Cash equivalents of benefits harged under s 2G I Cars available for private use J Car fuel K Pooled ars KA Setions 2F to 2K: supplementary L Mariners foreign earnings M Taxation of members of limited liability ompanies MA Taxation of limited partnerships with legal personality N Deemed residene of ompanies O Assessment where 1986 At ompanies are in atual residene in Isle of Man P Company easing to be 1986 At ompany PA Meaning of distribution Q Charge to tax on realised profit omprised in disount R Meaning of relevant disounted seurity S Meaning of transfer T Redemption to inlude onversion U Other transations deemed to be at market value V Issue of seurities in separate tranhes W Exluded indexed seurities X Gilt strips Y Realised losses on disounted seurities AT 3 of 1970 Page 3

4 Index Inome Tax At Z General interpretation and 4 [Repealed] Assessment of new resident non-orporate taxpayers and 7 [Repealed] A Non-orporate taxpayers: essation B Individuals: death Voluntary pensions liable to tax Temporary absentees to be harged as residents Temporary residents to be harged after six months of residene Assessment of profits of non-residents A Limit on inome hargeable on non-residents to 13 M [Repealed] Valuation of trading stok on essation of trade A to 14D [Repealed] Exemptions, Allowanes and Relief Inomes exempt from inome tax Disablement pensions exempt from tax A [Repealed] B Jurors remuneration: exemption C Maintenane payments: exemption Agriultural soieties exempt from tax Exemptions for friendly soieties A Boards and loal authorities to be exempt from tax Industrial soieties exempt from tax Members of friendly and industrial soieties A to 20F [Repealed] [Repealed] A Interest on ertain Government seurities exempt from tax Easter offerings exempt from tax Certain subsistene allowanes exempt from tax Governor s salary, et, exempt from tax Corporate taxpayers no dedution for distributed inome A Distributed inome: tax redit vouher B Value of a tax redit vouher C Vouher a redit against inome tax [Repealed] Dedution for remuneration of trustees A Provision of reliefs and allowanes for trading losses and apital expenditure [Repealed] Reliefs for ertain apital expenditure Crime-related payments No dedution allowed for apital employed A Dedutions in presribed ases B Expenses defrayed from remuneration C Compensation shemes Page 4 AT 3 of 1970

5 Inome Tax At 1970 Index 31D [Repealed] No dedution allowed for gratuitous allowanes A Redution of Class 4 ontributions Dedutions to be allowed in asertaining taxable inome and liability to inome tax and 34A [Repealed] Personal allowane A Allowane for blind persons B Allowane for disabled persons C Personal allowane for non-residents D Cessation of non-residene E Cessation of residene to 38 [Repealed] [Repealed] A Additional relief in respet of hildren: single persons AA Relief in respet of nursing expenses B Additional relief in respet of hildren: persons living together for the whole year C Additional relief in respet of hildren: persons living together for part of the year D Setions 39A to 39C: supplementary to 43 [Repealed] A Age-Relief: inome support B Age allowane [Repealed] A Dedution for provision for surviving spouse, ivil partner and hildren B Lump sum benefits on retirement to 47 [Repealed] Soial seurity benefits liable for tax A Relief in respet of payments on retirement, et B Statutory redundany payments C Medial insurane: relief D Eligible ontats Retirement annuities (relief for premiums) A Contrats for dependants or life insurane Nature and amount of relief for qualifying premiums A Carry-forward of unused relief under s Relief et for international personal and oupational pension shemes 72 50B Relief for ertain personal and oupational pension shemes C Relief for ertain personal and oupational pension shemes D Charge to tax: unauthorised payments E Supplementary harge on unauthorised payments F Administration Continuation of Exemptions, Allowanes and Relief Amendments as to friendly soieties Purhased life annuities other than retirement annuities AT 3 of 1970 Page 5

6 Index Inome Tax At Treatment of retirement annuities and purhased life annuities Relief from double taxation Tax redits A Relief in respet of repayment of ertain tax redits [Repealed] Relief in respet of tax in other territories Relief on rental inome A Relief on rental inome: pooling Carry forward against subsequent rents Allowanes given to individuals only Allowanes not given to non-residents A Tax treatment of VAT penalties et and repayment supplement Charities 90 61B and 61C [Repealed] D Donations by assoiations to harities E Donations by individuals to harities F Regulations for ss 61D and 61E Returns, et Returns to be returned annually A Cessation of residene: return B Prodution and auditing of aounts C Prodution and auditing of aounts of orporate taxpayer Return in respet of partners A Returns in respet of members of limited liability ompanies B Power to all for douments C Power to all for information relating to benefiial ownership D Falsifiation, et of douments [Repealed] Spouses and ivil partners - separate treatment A Eletion for joint treatment B Conditions for joint treatment C Eletions D Jointly held property E Meaning of living together F Revoation of joint treatment eletion G Cessation of joint treatment eletion H Transfer of unused allowanes, et in year of death I Transfer of unused allowanes in year of marriage or formation of ivil partnership J Supplementary provisions A66 Corporate taxpayers: returns Returns in respet of ompanies Information to be given by employers Return by attorneys, agents and guardians Prinipal and agent to be named in assessment Chargeability of agent of non-resident person Page 6 AT 3 of 1970

7 Inome Tax At 1970 Index 71 Requisition on persons to dedut tax from payments to non-residents [Repealed] Tax deduted based on inome of urrent year Individual remains liable until tax is paid Dedution of tax from payments to non-residents Delivery of lists by persons reeiving inome for other persons Default of agent is default of prinipal Partiulars of taxable payments Returns for persons dying during year of assessment Assistane by rate olletors A Duty to preserve reords Assessment of inome Basis of assessment, et for orporate taxpayers A Assessment of inome tax: non-orporate taxpayers B Aounting periods for trading profits Assessment list Assessment on aepted returns A Current year assessments A84 Enquiries into returns: orporate taxpayers B84 Verifiation of returns: general powers Verifiation of returns A Additional assessments Notie of assessment Assessment in default A Assessment in default: orporate taxpayers Aggrieved person may ontest assessment Inome Tax Commissioners Proedure at sittings of Commissioners Appeal from deision of Commissioners to Staff of Government Division Perjury before Staff of Government Division or Commissioners Entries in assessment list Payment of tax [Repealed] Tax payable in money or stamps Power to Treasury to make regulations A Forms Time for payment of tax by orporate taxpayers A Date when tax is payable B Payment on aount of inome tax C Setion 96B: supplementary Tax a first harge in favour of the Crown Notie to tax defaulters A Distraint for overdue tax B Power to set aside warrants Proeedings for reovery of tax Assessor s ertifiate evidene of taxes and harges in arrear AT 3 of 1970 Page 7

8 Index Inome Tax At Error or mistake in assessment A Error or mistake in assessment: orporate taxpayers Late assessments Protetion of offier when ating without malie Appliation of inome tax Administration Appointments of Assessor, Inspetor and other offiers, et A Unlawful assumption of harater of offier, et B Bribery and ollusion Delivery of douments, et C Power to all for douments, et of taxpayer D Power to all for douments relating to taxpayer E Noties under s 105D: further provisions F S 105D: auditors and tax advisers G Ss 105C - 105F: supplementary Court orders to deliver douments, et H Orders for the delivery of taxpayer s douments I Orders for the delivery of douments relating to taxpayer J Ss 105H and 105I: supplementary K Ss 105H and 105I: noties and proedures L Falsifiation et of douments M Entry with warrant to obtain material N Proedure where douments et are removed O Interpretation of ss 105C to 105N Information onfidential A Dislosure of information between the Assessor and the Colletor of Customs and Exise B Dislosure of information by Department of Soial Care et C Dislosure of information by the Assessor to the Department of Soial Care D Dislosure of information to enforing authorities, et E Dislosure of information to Treasury and Assessor by ertain authorities F Matters supplementary to ss 106C to 106E Repayment of tax A Repayment supplements: orporate taxpayers B Repayment supplements: non-orporate taxpayers Differential tax rates: anti-avoidane 155 A108 Loans to partiipators, et B108 Setion A108: treatment of ertain loans C108 Loans through intermediaries, et D108 Effet of release, et of debt in respet of loan under setion A E108 Returns Definitions 159 F108 Partiipator Page 8 AT 3 of 1970

9 Inome Tax At 1970 Index G108 Assoiate H108 Diretor I108 Assoiated orporate taxpayer J108 Loan reditor Penalties Failing to deliver a return or making untrue return Obstruting offiers False statements made to obtain allowanes Fraudulent onversion of property or making fraudulent statements A Interest on overdue tax B Interest on tax reovered to make good loss due to tax-payer s default Tax return defaulters - ivil penalties C Initial default D Extended default E Mitigation of penalties under setions 111C and 111D F Setions 111C to 111E: supplementary G Amount of penalty H Colletion of penalty I Appeals J Criminal offene: failure to make return Penalty where no other punishment is provided Corporate taxpayers - ivil penalties A Initial default B Extended default C Mitigation of penalties under setions setion 112A or 112B D Setion 112A or 112B: supplementary E Amount of penalty F Amount of penalty: suessive defaults G Penalty notie H Colletion of penalty I Criminal offene: failure to make return J Appeals Proeedings for offenes Onus of proof on defendant Onus of disproving guilty knowledge on defendant Misellaneous Servie of douments Failure of Assessor to at not to invalidate subsequent ation Effet of mistakes A Exlusion of extended limitation period Power of Tynwald to vary rates of allowanes, et, by resolution A Meaning of ontrol in ertain ontexts B Territorial sea C Conneted persons D Power to pay rewards AT 3 of 1970 Page 9

10 Index Inome Tax At E Beginning and ending of aounting periods F Powers of Assessor in doubtful ases G Publi douments to take aount of ivil partnerships Definitions [Repealed] Short title Commenement SCHEDULE RETIREMENT ANNUITIES - AMOUNT OF RELIEF FOR PERSONS OVER FIFTY 185 SCHEDULE 1A 185 FORM OF WARRANT FOR DISTRAINT FOR OVERDUE INCOME TAX 185 SCHEDULE 1B 186 TAXATION IN RESPECT OF CARS AND FUEL 186 SCHEDULE FORM OF DECLARATION TO BE MADE BY THE ISLE OF MAN INCOME TAX COMMISSIONERS 187 SCHEDULE 2A 188 PETROLEUM EXPLORATION AND EXPLOITATION 188 SCHEDULE ENDNOTES 193 TABLE OF LEGISLATION HISTORY 193 TABLE OF RENUMBERED PROVISIONS 193 TABLE OF ENDNOTE REFERENCES 193 Page 10 AT 3 of 1970

11 Inome Tax At 1970 Setion 1 i e INCOME TAX ACT 1970 Reeived Royal Assent: 24 Marh 1970 Passed: 19 May 1970 Commened: 19 May 1970 & s 123(2) AN ACT to onsolidate the Inome Tax Ats. GENERAL NOTES 1. The maximum fines in this At are as inreased by the Fines At 1986 and by the Criminal Justie (Penalties, Et.) At 1993 s Referenes to a Board of Tynwald are to be onstrued as referenes to a Department in aordane with the Government Departments At 1987 s Referenes to the Treasurer are to be onstrued in aordane with the Treasury At 1985 s See SD352/09 Rules of the High Court of Justie 2009 Sh 15.1 para 3 reprodued below: 3. In any statutory provision a referene to a petition of doleane shall be onstrued as an appliation to the ourt in aordane with Chapter 9 of Part 13 (review of detention) rule (appeal by way of ase stated), or () Chapter 2 of Part 14 (review of lawfulness of deision et), as the ase may require. Liability to Inome Tax 1 Imposition of inome tax [1946/4; 1962/1] (1) From and after the oming into fore of this At, there shall be raised, levied, olleted, and paid, in the manner hereinafter in this At provided, an annual tax, to be alled inome tax on all inomes derived from property, professions, trade, salaries, wages, pensions, annuities, fees, emoluments, ommissions, employments, or voations, or from any soure whatsoever. AT 3 of 1970 Page 11

12 Setion 1 Inome Tax At 1970 (2) In the ase of an individual who is resident in the Island, inome tax shall be payable in respet of every inome tax year at the lower rate on every pound of taxable inome up to and inluding the threshold; and at a presribed rate on every pound of taxable inome in exess of the threshold. 1 (2A) All other persons who are resident in the Island shall pay inome tax at the presribed rate on every pound of taxable inome. 2 (3) In the ase of a person who is not resident in the Island, inome tax shall be payable in respet of every inome tax year at the presribed rate on every pound of Manx inome. 3 (3A) In this setion the lower rate means suh rate of inome tax as may be determined by order made by the Treasury as being the lower rate; Manx inome means inome derived from any trade, profession, employment or voation arried on in the Island and from any other soure whatsoever within the Island; presribed rate means suh rate of inome tax as may be determined by order made by the Treasury; the threshold means suh amount of taxable inome as may be determined by order made by the Treasury as being the threshold for the payment of the presribed rate under subsetion (2). 4 (3B) An order under this setion () (d) may speify different rates for different provisions, purposes or different lasses of person and in respet of inome of different lasses, amounts or soures; may require that tax shall be payable at suh rate as is speified in the order in respet of the inome of a person even if a provision of the Inome Tax Ats or any other enatment (whih shall be speified in the order) (i) (ii) exempts or enables the exemption of suh person or inome from payment of inome tax (for example managed banks and exempt insurane ompanies); or presribes or enables the presription of a rate of inome tax in respet of suh person or inome different to that speified in the order (for example international ompanies); may speify a zero inome tax rate; may, where a zero rate is speified under paragraph (), speify an alternative rate to apply in plae of the zero rate in the event that suh irumstanes as are speified in the order arise; Page 12 AT 3 of 1970

13 Inome Tax At 1970 Setion 2 (e) may make the appliation of any rate subjet to onditions; (f) may inlude supplemental and transitional provisions. 5 (3BA) An order under this setion may inlude provision for the protetion of the revenue and for the exlusion of group relief in ases where any inome of a surrendering ompany is assessed to inome tax at a different rate to any inome of a laimant ompany and aordingly, suh an order may modify the operation of Shedule 2 to the Inome Tax At (3C) An order under this setion may inlude provision repealing or amending any provision of an enatment (other than this setion) whih is inonsistent with, or is unneessary or requires modifiation in onsequene of, the order; or without prejudie to the generality of paragraph, whih is speified in an order under subsetion (3B) or is supplementary to suh a provision. 7 (3D) Subsetion (3B) shall not limit the operation of setion 26 of the Interpretation At 1976 (onstrution of provisions as to exerise of powers and duties). 8 (3E) An order under this setion shall not ome into operation unless it is approved by Tynwald. 9 (4) Every person reeiving inome or to whom inome shall arue shall, in respet of suh inome, pay an annual inome tax as herein provided. 1A [Repealed] 10 2 Inome on whih tax is payable [1946/5(1)] (1) The inome in respet of whih inome tax is imposed by this At shall, subjet to the exeptions, exemptions, and provisions hereinafter ontained, inlude inome arising or aruing to any person residing in the Isle of Man and derived from the annual profits or gains of or in respet of or from any kind of property whatsoever, whether situate or being in the Isle of Man or elsewhere, or derived from the annual profits or gains of or in respet of or from any profession, trade, employment, or voation, whether they shall be respetively arried on in the Isle of Man or elsewhere; inome arising or aruing to any person not residing in the Isle of Man, whether a subjet of Her Majesty or not, and derived from the annual profits or gains of or in respet of or from any kind of property whatsoever in the Isle of Man, or derived from the AT 3 of 1970 Page 13

14 Setion 2 Inome Tax At 1970 () (d) (e) annual profits or gains of or in respet of or from any profession, trade, employment, or voation arried on in the Isle of Man; inome arising or aruing to any person whether residing in the Isle of Man or not, and derived from any publi offie or employment of profit or from any pension payable out of the publi revenue of the Isle of Man; inome arising or aruing to any person residing in the Isle of Man and derived from pensions reeived from any soure out of the Isle of Man; inome arising from gratuities made to or reeived by any employed person by reason of or in the ourse of his employment; (f) [Repealed] 11 (g) and generally inome arising or aruing to any person residing in the Isle of Man and derived from any soure whatsoever in or out of the Isle of Man and inome arising or aruing to any person not residing in the Isle of Man, whether a subjet of Her Majesty or not, and derived from any soure whatsoever in the Isle of Man. 12 Profit from export sales [1946/5(4)] (2) Profit derived from anything produed in or imported into the Isle of Man, whih is sold or exported out of the Isle of Man, whether suh profit is derived in the Isle of Man or not, shall be deemed to be inome derived from a soure in the Isle of Man. 2A Temporary tax exemption for ertain industrial undertakings (1) The powers onferred by this setion may only be exerised if the Treasury is satisfied that suh exerise () is in the interests of the eonomy of the Island; and is neessary for the purpose of establishing or developing any industrial undertaking in the Isle of Man; and will enable the undertaking to provide additional produtive employment in the Island. (2) The Treasury may, after onsultation with the Department of Eonomi Development, by resolution exempt for a period of up to 5 years, the whole or part of the profits or inome of any industrial undertaking from liability to tax under the Inome Tax Ats. 13 (3) The exemption of the profits or inome of an industrial undertaking from liability to tax onferred under subsetion (2) above, may, on the diretion of the Treasury, made after onsultation with the Department of Eonomi Development, inlude an exemption, in respet of Page 14 AT 3 of 1970

15 Inome Tax At 1970 Setion 2 distributions of suh profits and inome to shareholders resident outside the Island, from liability to inome tax under the Inome Tax Ats. 14 (4) Where an exemption under this setion eases to have effet, the industrial undertaking onerned shall, for the purposes of the Inome Tax Ats, be treated as if it had ommened business in the Island on the date of essation, but only in respet of the soure of the inome or profits of the undertaking whih were exempted from inome tax under this setion. (5) An industrial undertaking whih has been exempted from inome tax under this setion shall, when required by the Assessor, produe to him the balane sheet and the profit and loss aount of the ompany for any year of assessment and suh aounting reords and other douments as he may speify. (6) Exemption from inome tax under this setion shall not affet the liability of an industrial undertaking to dedut and aount for inome tax under the Inome Tax (Instalment Payments) At (7) In this setion industrial undertaking has the meaning given by setion 6 of the Industry Board At B 2C Revoation of exemption in ases of abuse (1) If the Treasury is of the opinion that any exemption granted under setion 2A of this At is being used to avoid or redue the liability to inome tax of any person, other than the industrial undertaking onerned, resident in the Island; or an industrial undertaking fails to omply with a requirement of the Assessor under subsetion (5) of that setion, the Treasury may resind every suh exemption. (2) Any person who is aggrieved by a deision under subsetion (1) above, to resind an exemption, shall be entitled to appeal to the Commissioners on the ground that the exemption was not being used to avoid or redue the liability to inome tax of any other person and the Commissioners may reverse, vary or onfirm any suh deision. 16 Basis of assessment of inome from any offie or employment (1) Notwithstanding setion 81 of this At, where any inome attributable to remuneration arues to or is reeived by an individual in a year of assessment, the Assessor shall, in respet of that year, assess suh inome on the amount of the remuneration reeived or arued in that year. (2) In this setion remuneration means any inome arising AT 3 of 1970 Page 15

16 Setion 2 Inome Tax At 1970 in respet of any remuneration from any offie, or employment held by the individual; or in respet of any pension, superannuation, or other allowane, deferred pay, or ompensation for loss of offie given in respet of the past servies of the individual, or of the husband or parent of the individual, in any offie or employment, or given to the individual in respet of past servies of any deeased person, whether the individual, husband or parent of the individual shall have ontributed to suh pension, superannuation, allowane, or deferred pay or not, but shall not inlude any inome speified in paragraph above whih is paid by a person outside the Island. (3) The Treasury may by order amend the definition of remuneration ontained in subsetion (2) of this setion. (4) An order under subsetion (3) of this setion shall not ome into operation until it is approved by Tynwald. 17 2D and 2E [Repealed] 18 2F Payments in respet of expenses [P1988/1/153] (1) Subjet to the provisions of this setion and setions 2G to 2K, where in any year by reason of a person s employment there are paid to him in respet of expenses any sums whih, apart from this setion, are not hargeable to tax as his inome, those sums are to be treated as inome attributable to the employment and aordingly hargeable to inome tax. (2) Subsetion (1) is without prejudie to any laim for dedutions under setion 31 or 31A of this At. (3) The referene in subsetion (1) to sums paid in respet of expenses inludes any sums put at the employee s disposal by reason of his employment and paid away by him. 19 2G Benefits in kind [P1988/1/154] (1) Where in any year by reason of a person s employment there is provided for him, or for others being members of his family or household, any benefit to whih this setion applies; and the ost of providing the benefit is not (apart from this setion) hargeable to tax as his inome, Page 16 AT 3 of 1970

17 Inome Tax At 1970 Setion 2 there is to be treated as inome attributable to the employment, and aordingly hargeable to inome tax, an amount equal to whatever is the ash equivalent of the benefit. (2) The benefits to whih this setion applies are aommodation, entertainment, domesti or other servies, and other benefits and failities of whatsoever nature (whether or not similar to any of those mentioned above in this subsetion), exluding however any benefit hargeable under setion 2I or 2J. 20 (3) For the purposes of this setion and setion 2H the persons providing a benefit are those at whose ost the provision is made. (4) The Treasury may by order provide for exemptions from this setion. (5) An order under subsetion (4) shall not ome into operation until its approval by Tynwald. 21 2H Cash equivalents of benefits harged under s 2G [P1988/1/156] (1) The ash equivalent of any benefit hargeable to tax under setion 2G is an amount equal to the ost of the benefit, less so muh (if any) of it as is made good by the employee to those providing the benefit. (2) Subjet to the following subsetions, the ost of a benefit is the amount of any expense inurred in or in onnetion with its provision, and (here and in those subsetions) inludes a proper proportion of any expense relating partly to the benefit and partly to other matters. (2A) Where the benefit onsists in the transfer of an asset by any person, and sine that person aquired or produed the asset it has not depreiated; and subsetions (4) and (5) do not apply, the ost of the benefit is deemed to be the greater of either (i) the market value of the asset at the time of transfer; or (ii) the ost of the asset to that person. 22 (3) Where the benefit onsists in the transfer of an asset by any person, and sine that person aquired or produed the asset it has been used or has depreiated, the ost of the benefit is deemed to be the market value of the asset at the time of transfer. (4) Where the asset referred to in subsetion (3) is not a ar and before the transfer a person (whether or not the transferee) has been hargeable to tax in respet of the asset in aordane with subsetion (5), the amount whih under subsetion (3) is deemed to be the ost of the benefit shall (if apart from this subsetion it would be less) be deemed to be AT 3 of 1970 Page 17

18 Setion 2 Inome Tax At 1970 the market value of the asset at the time when it was first applied (by those providing the benefit in question) for the provision of any benefit for a person, or for members of his family or household, by reason of his employment, less the aggregate of the amounts taken into aount as the ost of the benefit in harging tax in aordane with subsetion (5) in the year or years up to and inluding that in whih the transfer takes plae. (5) Where the benefit onsists in an asset being plaed at the employee s disposal, or at the disposal of others being members of his family or household, for his or their use (without any transfer of the property in the asset), or of its being used wholly or partly for his or their purposes, then the ost of the benefit in any year is deemed to be the annual value of the use of the asset asertained under subsetion (6); plus the total of any expense inurred in or in onnetion with the provision of the benefit exluding (i) (ii) the expense of aquiring or produing it inurred by the person to whom the asset belongs; and any rent or hire harge payable for the asset by those providing the benefit. (6) Subjet to subsetion (7), the annual value of the use of the asset, for the purposes of subsetion (5) in the ase of land, is its annual value determined in aordane with subsetion (9); and in any other ase is 20 per ent. of its market value at the time when it was first applied (by those providing the benefit in question) in the provision of any benefit for a person, or for members of his family or household, by reason of his employment. (7) Where there is payable, by those providing the benefit, any sum by way of rent or hire-harge for the asset, the annual amount of whih is equal to, or greater than, the annual value of the use of the asset as asertained under subsetion (6), that amount shall be substituted for the annual value in subsetion (5). (8) From the ash equivalent there are dedutible in eah ase under setion 31 suh amounts (if any) as would have been so dedutible if the ost of the benefit had been inurred by the employee out of his inome attributable to the employment. (9) For the purposes of subsetion (6), the annual value of land shall be taken to be the rent whih might reasonably be expeted to be obtained on a letting from year to year if the tenant undertook to pay all usual Page 18 AT 3 of 1970

19 Inome Tax At 1970 Setion 2 tenant s rates and taxes, and if the landlord undertook to bear the osts of the repairs and insurane, and the other expenses, if any, neessary for maintaining the subjet of the valuation in a state to ommand that rent. (10) The ash equivalent of a benefit referred to in setion D108(3) (disappliation of setion D108 where an amount is treated as inome attributable to employment) is a sum equal to the amount released or written off plus an amount equal to suh proportion of the amount of the loan or advane released or written off as orresponds to the relevant rate presribed for the purposes of this setion under setion 1 of this At in fore for the year of assessment in whih the loan or advane was released or written off I Cars available for private use [P1988/1/157] (1) Where in any year, a ar is made available (without any transfer of the property in it) either to a person or to others being members of his family or household, and it is so made available by reason of his employment and it is in that year available for his or their private use; and the benefit of the ar is not (apart from this setion) hargeable to tax as the employee s inome, there is to be treated as inome attributable to the employment, and aordingly hargeable to inome tax, an amount equal to whatever is the ash equivalent of that benefit in that year. (2) Subjet to the provisions of this setion, the ash equivalent of that benefit is to be asertained from the table in Part I of Shedule 1B. 25 (3) Where in any year the benefit of a ar is hargeable to tax under this setion as the employee s inome he shall not be taxable in respet of the disharge of any liability of his in onnetion with the ar; under setion 2F in respet of any payment made to him in respet of expenses inurred by him in onnetion with the ar. (4) The Treasury may by order taking effet from the beginning of any inome tax year after it is made amend the table in Part I of Shedule 1B or substitute a different table; or provide for the ash equivalent of a benefit under this setion or setion 2J to be asertained in aordane with the provisions of the order (by referene to any riteria presribed in the order or otherwise) and not in aordane with the table in Part I of Shedule 1B. 26 AT 3 of 1970 Page 19

20 Setion 2 Inome Tax At 1970 (5) Part II of Shedule 1B has effet with respet to the appliation of the table in Part I; and 27 for the redution of the ash equivalent under this setion in ases where the ar has not been available for the whole of the relevant year or the employee makes any payment for the use of it. 28 (6) An order under subsetion (4) shall not ome into operation until it is approved by Tynwald. 29 2J Car fuel [P1988/1/158] (1) Where in any year fuel is provided by reason of a person s employment for a ar whih is made available as mentioned in setion 21, an amount equal to whatever is the ash equivalent of that benefit in that year shall be treated as inome attributable to the employment and, aordingly, shall be hargeable to inome tax. (2) Subjet to the provisions of this setion, unless an order under setion 2I(4) provides for the ash equivalent of a benefit under this setion to be asertained in aordane with the order, the ash equivalent of that benefit is to be asertained from the table in Part I of Shedule 1B. 30 (3) Without prejudie to the generality of subsetion (1), fuel is provided for a ar if () (4) [Repealed] 31 any liability in respet of the provision of fuel for the ar is disharged; a non-ash vouher or a redit-token is used to obtain fuel for the ar or money whih is spent on suh fuel; any sum is paid in respet of expenses inurred in providing fuel for the ar. (5) Where paragraph 2 of Part II of Shedule 1B applies to redue the ash equivalent of the benefit of the ar for whih the fuel is provided, the same redution shall be made to the ash equivalent of the benefit of the fuel asertained under subsetion (2). 32 (6) If in the relevant year the employee is required to make good to the person providing the fuel the whole of the expense inurred by him in or in onnetion with the provision of fuel for his private use and he does so; or the fuel is made available only for business travel; the ash equivalent is nil. Page 20 AT 3 of 1970

21 Inome Tax At 1970 Setion (7) [Repealed] 2K Pooled ars [P1988/1/159] (1) This setion applies to any ar in the ase of whih the Assessor is satisfied (whether on a laim under this setion or otherwise) that it has for any year been inluded in a ar pool for the use of the employees of one or more employers. (2) A ar is to be treated as having been so inluded for a year if () in that year it was made available to, and atually used by, more than one of those employees and, in the ase of eah of them, it was made available to him by reason of his employment but it was not in that year ordinarily used by one of them to the exlusion of the others; and in the ase of eah of them any private use of the ar made by him in that year was merely inidental to his other use of it in the year; and it was in that year not normally kept overnight on or in the viinity of any residential premises where any of the employees was residing, exept while being kept overnight on premises oupied by the person making the ar available to them. (3) Where this setion applies to a ar, then for the year in question the ar is to be treated under setions 2G and 2I as not having been available for the private use of any of the employees. (4) A laim under this setion in respet of a ar for any year may be made by any one of the employees mentioned in subsetion (2) (referred to below as the employees onerned ) or by the employer on behalf of all of them. (5) On an appeal against the deision of the Assessor on a laim under this setion all the employees onerned may take part in the proeedings, and the determination of the Commissioners or the High Court shall be binding on all those employees, whether or not they have taken part in the proeedings. (6) Where an appeal against the deision of the Assessor on a laim under this setion has been determined, no appeal against the Assessor s deision on any other suh laim in respet of the same ar and the same year shall be entertained. 35 2KA Setions 2F to 2K: supplementary In setions 2F to 2K, employment means any offie or employment, the remuneration from whih is assessed under setion 2C, and aordingly, AT 3 of 1970 Page 21

22 Setion 2 Inome Tax At 1970 referenes to an employee or to an employer inlude referenes to the holder of an offie or to the person under whom the offie is held. 36 2L Mariners foreign earnings [P1988/1/132(4); 193(1) and Sh 12] (1) Where in any year of assessment the duties of employment as a mariner are performed wholly or partly outside the Isle of Man; and any of those duties are performed in the ourse of a qualifying period whih falls wholly or partly in that year and onsists of at least 365 days, then, in harging tax under the Inome Tax Ats on the amount of the remuneration from that employment attributable to the period, or to so muh of it as falls in that year of assessment, there shall be allowed a dedution equal to the whole of that amount. 37 (1A) For the purposes of this setion, the amount of the remuneration for a year of assessment from any employment shall be taken to be the amount remaining after any allowable expenses, dedutions and reliefs attributable to or arising in respet of that remuneration; and the dedution of an amount equivalent to the amount of a single person s personal allowane under setion 35(3). 38 (2) For the purposes of subsetion (1), a qualifying period is a period of onseutive days whih either onsists entirely of days of absene from the Isle of Man; or onsists partly of suh days and partly of days inluded under subsetion (3). (3) Where, in the ase of any person, a period onsisting entirely of days of absene from the Isle of Man ( the relevant period ) omes to an end and there have previously been one or more qualifying periods, the relevant period and the qualifying period (or, if more than one, the last qualifying period) together with the intervening days between those periods shall be treated as a single qualifying period if there are no more than 183 intervening days; and the number of days in the resulting period whih are not days of absene from the Isle of Man does not exeed one half of the total number of days in that period. (4) For the purposes of subsetion (1), remuneration from employment as a mariner whih is attributable to a qualifying period inludes any remuneration from that employment for a period of leave immediately Page 22 AT 3 of 1970

23 Inome Tax At 1970 Setion 2 following that period but not so as to make any remuneration for one year of assessment remuneration for another. (5) For the purposes of this setion, any duties whih a person performs on a vessel shall be treated as performed outside the Isle of Man where the vessel is engaged on a voyage beginning and ending outside the Isle of Man whih extends to a plae outside the British Isles (but exlusive of any part of it whih extends to the Isle of Man); or a voyage beginning or ending in the Isle of Man whih extends to a plae outside the British Isles (but exlusive of any part of it whih begins or ends in the Isle of Man), but not otherwise. (6) Where the duties of an employment fall to be performed in the Isle of Man in the year of assessment, subsetion (7) shall apply for the purposes of subsetion (1). (7) In any ase to whih this subsetion applies, any duties performed outside the Isle of Man shall be treated as performed in the Isle of Man if the performane is merely inidental to the performane of other duties in the Isle of Man. (8) For the purposes of this setion a person shall not be regarded as absent from the Isle of Man on any day unless he is so absent at the end of it. (9) In this setion employment as a mariner means employment onsisting of the performane of duties for the working of a vessel (or of suh duties and of others inidental to them); remuneration has the meaning given by setion 2C of the Inome Tax At 1970; vessel means any desription of water raft whih has its own means of mehanial propulsion but does not inlude an offshore installation within the meaning of setion 1(3) of the Mineral Workings (Offshore Installations) (Isle of Man) At 1974 whether on or off station; any submersible or semi-submersible raft whih is onstruted or adapted (i) (ii) (iii) to undertake drilling operations at sea; or for purposes whih are auxiliary to suh operations; or to transport installations and rigs; voyage means a voyage from the port of departure to the next following port of all whether or not it is the ultimate destination of the vessel. 39 AT 3 of 1970 Page 23

24 Setion 2 Inome Tax At M Taxation of members of limited liability ompanies (1) Notwithstanding the provisions of the Inome Tax Ats relating to the taxation of a body orporate, for the purposes of those Ats a limited liability ompany shall be treated in all respets as if it is a partnership; and eah member of a limited liability ompany shall be treated as a partner. (2) As a onsequene of subsetion (1) a limited liability ompany shall not be liable to pay inome tax on its profits; and eah member shall be liable to pay inome tax at the appropriate rate in respet of his whole inome, inluding his share of the profits of the limited liability ompany. (3) Nothing in this setion shall operate to release or extinguish any liability of an attorney or agent to pay Manx inome tax as attorney or agent of the individual members of a limited liability ompany. (4) Without prejudie to the generality of subsetions (1) and (2), no dedutions, allowanes or reliefs whih an be taken into aount in the alulation of the taxable inome of a body orporate; and whih, but for those subsetions, ould have been taken into aount in the alulation of the taxable inome of a limited liability ompany, shall be allowed or taken into aount in the alulation of the profits of a limited liability ompany or the portion of the taxable inome of a member arising from that member s share of the profits of the ompany. (5) Without prejudie to the foregoing provisions of this setion, setion 63 of this At shall not apply in respet of a limited liability ompany. (6) This setion shall not affet the liability of a limited liability ompany to dedut and aount for tax under the Inome Tax (Instalment Payments) At 1974; Part 3 of the Inome Tax At MA Taxation of limited partnerships with legal personality (1) A limited partnership with legal personality is to be treated as a partnership (and not as a orporate taxpayer) for the purposes of the Inome Tax Ats and eah member of the partnership is to be treated as a partner. (2) Consequently Page 24 AT 3 of 1970

25 Inome Tax At 1970 Setion 2 () a limited partnership with legal personality is not liable to pay inome tax on its profits; eah partner is liable to pay inome tax at the appropriate rate in respet of his or her whole inome, inluding his or her share of the profits of the partnership; and setion 63 (return in respet of partners) applies. (3) Nothing in this setion releases or extinguishes any liability of an attorney or agent to pay Manx inome tax as attorney or agent of the partners of the partnership; affets the liability of a limited partnership to dedut and aount for tax under (i) (ii) the Inome Tax (Instalment Payments) At 1974; or Part 3 of the Inome Tax At 1989 (subontrators in the onstrution industry). (4) In this setion, a limited partnership with legal personality means a limited partnership (within the meaning of Part II of the Partnership At 1909 (limited partnerships)) whih has legal personality as a result of ompliane with setion 48B or 48C of the Partnership At N 2O Deemed residene of ompanies (1) For the purposes of the Inome Tax Ats all ompanies inorporated after 5 April 1999; and all ompanies inorporated before 6 April 1999 whih are not 1986 At ompanies, are deemed to be resident in the Isle of Man. (2) In this setion, ompany has the meaning given in setion 341(1) of the Companies At 1931 and inludes a 2006 ompany. (3) In this At, 1986 At ompany means a ompany whih is a nonresident ompany within the meaning of the Non-Resident Company Duty At (4) In this At, 2006 ompany means a ompany inorporated, ontinued or re-registered under the Companies At Assessment where 1986 At ompanies are in atual residene in Isle of Man (1) The Assessor may, in respet of any year of assessment, assess the inome of a 1986 At ompany if he is satisfied that the ompany is in fat resident in the Isle of Man; or inome arises or arues to the ompany and is AT 3 of 1970 Page 25

26 Setion 2 Inome Tax At 1970 (i) (ii) derived from the annual profits or gains of or in respet of or from any kind of property whatsoever in the Isle of Man; or derived from the annual profits or gains of or in respet of or from any profession, trade, employment, or voation arried on in the Isle of Man. (2) For the purposes of this setion, a 1986 At ompany shall not be treated as being resident in the Isle of Man by reason only of the fat that a person who is resident in the Isle of Man is appointed as the liquidator of the ompany. (3) Where a ompany pays non-resident ompany duty under the Non- Resident Company Duty At 1986, the amount of duty paid by that ompany in any year of assessment shall, exept in the ase of a ompany to whih setion 2P(1) applies, be set against or refunded from any inome tax payable or paid by the ompany for that year. 42 2P Company easing to be 1986 At ompany (1) Where in any year of assessment a 1986 At ompany eases to be suh, the ompany shall not be assessed to inome tax (exept as provided by setion 20(1)) in respet of inome whih arises or arues to it for that part of the year in whih it is a 1986 At ompany. (2) For the purposes of the Inome Tax Ats a 1986 At ompany shall be treated as beoming resident in the Isle of Man on the date on whih it eases to be a 1986 At ompany. 43 2PA Meaning of distribution (1) Inome arising or aruing to any person residing in the Island and derived from any inome distribution paid by a orporate taxpayer resident in the Island shall be inome in respet of whih inome tax is imposed by this At for the purposes of setion 2. (2) Where an inome distribution takes a nonmonetary form, an amount equal to whatever is the ash equivalent of the inome distribution is inome in respet of whih inome tax is imposed by this At for the purposes of setion 2. (3) The ash equivalent of an inome distribution is deemed to be the market value of the asset transferred at the time of transfer (where an asset is transferred by a orporate taxpayer) or the amount of debt inurred (where the orporate taxpayer inurs a debt). (4) [Repealed] 44 (5) In this setion distribution means Page 26 AT 3 of 1970

27 Inome Tax At 1970 Setion 2 the diret or indiret transfer of any assets of a orporate taxpayer, other than the orporate taxpayer s own shares, to or for the benefit of a member of the orporate taxpayer; or the inurring of a debt by a orporate taxpayer to or for the benefit of a member of the orporate taxpayer, in relation to shares held by a shareholder, or the entitlements to distributions of a member who is not a shareholder, and whether by means of (i) (ii) (iii) (iv) or otherwise; the payment of a dividend; the purhase of an asset; the purhase, redemption or other aquisition of shares; the transfer or assignment of indebtedness, group shall be onstrued in aordane with Shedule 2 to the Inome Tax At 1980; inome distribution means a distribution made from the orporate taxpayer s inome from its urrent aounting period; or the undistributed profits of the orporate taxpayer from an earlier aounting period; member shall be onstrued in aordane with setion (6) This setion does not prejudie the generality of setion Q Charge to tax on realised profit omprised in disount [P1996/8/ Sh13 para 1] (1) Where a person realises the profit from the disount on a relevant disounted seurity, that person shall be harged to inome tax on that profit. (2) For the purposes of this setion and setions 2R to 2Z (referred to olletively in this setion and those setions as this Part ) a person realises the profit from the disount on a relevant disounted seurity where that person transfers suh a seurity or beomes entitled, as the person holding the seurity, to any payment on its redemption; and the amount payable on the transfer or redemption exeeds the amount paid by that person in respet of the aquisition of the seurity. (3) For the purposes of this Part the profit shall be taken AT 3 of 1970 Page 27

28 Setion 2 Inome Tax At 1970 to be equal to the amount of the exess redued by the amount of any relevant osts; and to arise, for the purposes of inome tax, in the year of assessment in whih the transfer or redemption takes plae. (4) In this setion relevant ost, in relation to a seurity that is transferred or redeemed, are all the following osts the osts inurred in onnetion with the aquisition of the seurity by the person making the transfer or, as the ase may be, the person entitled to a payment on the redemption; and the osts inurred by that person in onnetion with the transfer or redemption of the seurity; and for the purposes of this Part osts falling within paragraph shall not be regarded as amounts paid in respet of the aquisition of a seurity. 47 2R Meaning of relevant disounted seurity [P1996/8/ Sh13 para 3] (1) Subjet to subsetion (2) and setion 2X(1), in this Part relevant disounted seurity means any seurity whih (whenever issued) is suh that taking the seurity as at the time of its issue, and assuming redemption in aordane with its terms, the amount payable on redemption is an amount involving a deep gain or might be an amount whih would involve suh a gain. (2) The following are not relevant disounted seurities for the purposes of this Part () (d) (e) (f) shares in a ompany; gilt-edged seurities that are not strips; exluded indexed seurities; life assurane poliies; apital redemption poliies; and subjet to setion 2V, seurities issued (at whatever time) under the same prospetus as other seurities whih have been issued previously but (disregarding that setion) are not themselves relevant disounted seurities. (3) For the purposes of this Part the amount payable on redemption of a seurity involves a deep gain if the issue prie is less than the amount so payable; and the amount by whih it is less represents more than the relevant perentage of the amount so payable. Page 28 AT 3 of 1970