Most articles my colleagues and I publish extol the virtues of Gibraltar, as one might expect. This is Acquarius’ home and from here we provide fiduciary solutions for our global client base. Clients and their advisers have come to expect the full range of trust and company services thanks to Gibraltar’s robust, constantly updated legislation that is itself based on English common law. As a result, Gibraltar’s offering is among the best to be found anywhere. 

‍

But – and say this quietly – occasionally using Gibraltar alone may not provide the full solution. For any number of reasons, another jurisdiction may be required for part of the proposed structure, or even all of it. This might relate to tax, residency, banking, business separation – or simply because another place is more appropriate.

‍

Whilst we are unashamedly Gibraltar-centric, at Acquarius we recognise this need that arises from time to time. We have taken steps to ensure that where a second (or even third or fourth) jurisdiction is needed, we are able to suggest meaningful alternatives, recommending business partners whose values align with our own. There is a wide choice and occasionally we are asked to recommend a place that is at once comparable to, and yet different from, Gibraltar. A place that subscribes to the same values and is similarly well regulated. Step forward the Isle of Man.

‍

In previous Acquarius Insights, my colleagues and I have written of other international finance jurisdictions worldwide (what we used to call offshore). Two distinct groups are based on the British model – the British Overseas Territories of which Gibraltar is a proud member, and the Crown Dependencies which are the Isle of Man and the separate Bailiwicks of Jersey and Guernsey. Readers would be forgiven for thinking that my bias toward the former is due entirely to my Manx heritage, but the real reason is rather more profound.

‍

Both Channel Islands are broadly similar, and to all intents and purposes, they offer the same services as those we provide locally. It therefore comes as no surprise that we have many “expats” from the islands who have ended up working in Gibraltar. The Isle of Man is somewhat different. For example, its legislature – Tynwald – dates back more than a thousand years and is said to be the longest established continuous parliament anywhere. 

‍

There are other key differences that set the Isle of Man apart from its peers, any one of which may be attractive to a client. For me, the most interesting is VAT. Herein lies a real benefit for a trading entity perhaps working in the “onshore world” be that the UK, Europe or beyond. And it is now new. The island adopted VAT when Britain joined the EEC in 1973 and, prior to that, levied purchase tax. 

‍

For example, if a client owns commercial property through a VAT-registered Isle of Man company, they may recover VAT charged on related expenses. By placing this company within a Gibraltar trust, the client can benefit from enhanced privacy and succession planning (subject as always to robust advance tax advice of course).

‍

In this context, VAT is only “useful” where there are such charges to offset. And Gibraltar has distinct advantages that we have spoken of regularly in past Insights. These include our significantly lower cost base whilst not compromising one iota from the robust regulation for which we are rightly commended. And remember, fees in Gibraltar are not subject to VAT as it does not exist here. 

‍

Acquarius is by no means alone in recognising the benefits of being able to offer clients and their advisers the ability to set up in both places as part of a wider structure. Accounting “Big Four” member KPMG is present in the island and Gibraltar. Neil Kelly, Advisory Partner, of KPMG Islands Group, based in the Isle of Man says: “The Isle of Man is a well-regulated jurisdiction with a strong and established Trust and Corporate Service Provider (TCSP) sector.  Using multi jurisdictions to provide the required structures needed for clients is a common occurrence and ensuring that these structures are Tax and VAT efficient is part of the service that IOM TCSPs frequently offer.”  KPMG Islands Group offers a variety of Tax and Advisory Services to TCSPs.  

‍

The Isle of Man boasts a history every bit as rich and varied as ours here in Gibraltar. True, the island may not be one of the ancient “Pillars of Hercules” but both places are proud of their neolithic history. Gibraltar might not have a massive Viking castle such as that at Peel, although the Moorish equivalent takes some beating! 

‍

More importantly, both places are leading global centres in terms of their regulation and sophisticated corporate & trust sector. The pair of jurisdictions make for an ideal combination where this is needed in a particular situation. 

‍

If you or your clients are considering how Gibraltar and the Isle of Man might complement your planning, we would welcome a confidential, no-obligation conversation.