Isle of Man

Deductions are available to individuals only for the actual expenses incurred wholly and exclusively in acquiring the income on which income tax is payable. This might include professional subscriptions and travel expenses where an individual is employed and other costs incurred in the normal course of business where the individual is self-employed.

For employees, the expense of travelling to and from work is not deductible.

Self-employed individuals may also be eligible to claim relief for certain capital expenditure incurred as outlined in the Deductions section in the Corporate tax summary.

Personal deductions

Deductible non-business expenses include the following:

• Interest paid by a resident on any mortgage or loan, provided, in most cases, that the lending institution is based in the Isle of Man. If interest is paid at more than a reasonable commercial rate, the excess is not deductible.
  
  The maximum amount of interest for which relief can be claimed is IMP 5,000 per annum. This amount is doubled in the case of a married couple or civil partners who have chosen to be jointly assessed, but the relief is restricted to 10%.
• Pension contributions paid to approved schemes.
• Donations to charities exceeding IMP 100 up to a limit of IMP 7,000 per annum and certain covenanted educational payments up to IMP 5,500 per annum. These reliefs are restricted to 10%.

Standard deductions

There are no standard or flat rate deductions.

Personal allowances

Allowances for residents for 2024/25 (year commencing on 6 April 2024) are as follows:

* Available in addition to a single person allowance.

Personal allowances are only available for offset against income of the tax year in question and cannot be carried back or forward.

A personal tax credit is available under certain circumstances to Isle of Man's resident individuals who are aged 65 or over or who are registered disabled or blind, and whose income has not reached the level of the single person allowance.

Non-residents are not entitled to a personal allowance; all of their taxable income will be taxed at the prevailing higher rate (22% for 2024/25).

The personal allowance is reduced by IMP 1 for every IMP 2 that income is in excess of IMP 100,000 for single persons or IMP 200,000 for a jointly assessed couples.

Losses

Trading losses incurred by self-employed individuals can be relieved against total income assessable in the year of the loss and/or carried forward and set against total income assessable in the following year.

Loss relief can be restricted where trades are carried out on a non-commercial basis or where the trade is of farming or market gardening.