3 things to know about the Isle of Man

If you mention the Isle of Man to the average British person, they might look at you blankly and then say, “Oh yes, that little island off the south coast”. No, that’s the Isle of Wight. The Isle of Man lies in the Irish Sea, equidistant between England and Ireland. Like Jersey and Guernsey, the Isle of Man is a crown dependency, which means that it’s under the sovereignty of the British crown but does not form part of the UK. We spoke to our Local In-Market Expert to find out more.

#1: The island is known for its finance sector – but don’t call it a tax haven

In the late 19^th and early 20^th centuries, tourism was a significant industry on the Isle of Man – hence the proliferation of Victorian hotels and boarding houses all over the island. But with the advent of package holidays from the 1960s onwards, British tourists preferred to go further afield, and the island’s tourism industry rapidly declined.

In its place came the finance sector, which today makes up about half of the island’s economy. This includes verticals like banking, insurance, pensions, employee benefits, fiduciaries, funds, and other professional services. The island offers a low tax regime – similar to Jersey and Guernsey – which incentivises both financial services and also high net worth individuals to base themselves there. For example, there is no capital gains tax, stamp duty, corporation tax, inheritance tax, or other forms of wealth tax, and there are only two rates of income tax – a lower rate of 10% and a higher rate of 20%.

However, referring to the island as a ‘tax haven’ is seen (on the island anyway) as somewhat pejorative. The island has made great efforts in recent years to comply with guidelines from the OECD and IMF and has numerous tax agreements on disclosure regarding non-residents. In 2011, the OECD released a Tax Transparency Report assessing over 50 jurisdictions and found the Isle of Man to be one of only eight countries to be fully compliant in all main areas.

More recently, the island’s government has tried to diversify away from financial services to promote the island as a jurisdiction for gambling and e-gaming businesses. The island offers low betting duty, a streamlined process for obtaining betting licences, and has been whitelisted by both the UK Gaming Commission and the OECD. Big gaming players with sizeable operations on the island include Pokerstars and Microgaming.

The present day emphasis on gambling sits somewhat awkwardly with the island’s Methodist heritage. Back in the day, in a more religious era, the island had a strong Methodist tradition (reflected in some of its rather stern Victorian architecture). Gambling, amongst other things, is frowned upon within Methodism.

#2: The island hosts the biggest road racing festival in the world

Since 1907, the Isle of Man has been home to the annual TT or Tourist Trophy motorcycling races. This is a two week festival (one week for practice and one week for racing) which takes place every year at the end of May and beginning of June. The races take place over a 37 mile course encompassing public roads (which are closed for the races) including, notoriously, Snaefell mountain (the only section of road in the British Isles that doesn’t have a speed limit). The TT is considered the most dangerous road racing event in the world – partly because of the nature of the roads (often narrow and twisting and lined with stone walls) and the speeds at which modern bikes now reach (up to 135 mph).

Since 1907, a total of 156 riders have been killed at the TT, and 9 other lives lost (a combination of spectators and race officials). This means that about one in 250 entrants to the TT have lost their lives (mostly young men). Few sports have this mortality rate, and no sport as dangerous as this is sponsored and promoted at state level as the Isle of Man TT races are.

Because of the danger, the TT has become something of a culture war issue on the island (long before the term ‘culture war’ became fashionable.) Proponents argue that the event is uniquely Manx, brings economic and cultural advantages to the island, and that participants know the risks and should be free to do what they love. Opponents argue that, irrespective of the economic benefits, no government should facilitate a sport with this mortality rate. Some residents simply object to the inconvenience of two weeks of road closures and the fact that the island’s only hospital – suffering the aftermath of Covid as elsewhere – puts elective surgeries on hold for the duration of the festival so that the inevitable casualties can be attended to.

The economic case for the TT is hard to pin down – it’s not as clearcut as its cheerleaders like to claim – but it is true that the event has always attracted a sizeable international audience and continues to do so (about 40,000 visitors this year with a much larger global viewing audience via online streaming). If you meet someone from overseas who has heard of the Isle of Man, it’s probably because of the TT. The branding advantages for the island are, therefore, considerable.

#3: The Isle of Man has the world’s oldest continuous parliament

The island’s parliament is called Tynwald, which was formed in the 9^th century, making it the oldest continuous parliament in the world. The parliament is tri-cameral – i.e. made up of three parts, which are the House of Keys (the lower chamber which is directly elected), the Legislative Council (which is indirectly chosen), and the Tynwald Court (which is when the two chambers sit together).

Tynwald Day is 5^th July – this is when Tynwald meets in a ceremonial ceremony (held outside on Tynwald Hill) and laws for that year are publicly proclaimed in both English and Manx Gaelic. Petitions from the public are also received.

King Charles is the head of state, as was Queen Elizabeth before him. Regardless of whether the monarch is a man or a woman, their title on the island is the somewhat omnipotent-sounding Lord of Mann. A Lieutenant Governor – appointed to five year terms – represents the monarch.

The Isle of Man was the first nation in the world to give women the right to vote in a general election (in 1881). By contrast, women in mainland Britain did not receive the vote on the same terms as men until 1928. In other areas, the island has been less progressive: homosexuality was not decriminalised until 1992 (and was subject to fierce debate at the time), and birching remained on the statute book as a punishment for certain crimes until 1993 (although the last birching took place on the island in 1976.)

The Isle of Man at a glance

• Its landmass is 32 miles long and 11 miles wide.
• The population is circa 86,000 (the government wants to grow this to 100,000 by 2037).
• Its national symbol is the ‘Three Legs of Man’ (an ancient motif known as a triskelion) with the accompanying motto: However you throw me, I stand.
• The island is known for Manx cats – a breed of cats which don’t have tails.
• The capital is Douglas (which was made a city in 2022 as part of Queen Elizabeth’s Platinum Jubilee civic honours).
• The island’s annual GDP is about £5 billion, which equates to a GDP per capita of nearly double the UK’s (although this is skewed by the presence of so many international companies based there for tax reasons).
• The island’s Celtic heritage has been a big influence over the centuries, though has struggled to withstand the dominating effects of Anglicisation. The Manx Gaelic language is regarded as critically endangered.
• Some island residents refer to mainland Britain as ‘the adjacent island’ as a way of verbally cutting it down to size.
• It’s considered bad luck to refer to rats as rats. Manx people will say ‘long tails’ instead.
• To the extent the island has a national dish, it would be chips, cheese, and gravy (with some optimistic attempts to brand this as ‘Manx street food’).

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