Dr Alex Allinson, has defended the government’s policy of not taxing certain company distributions.
Responding to a question in Keys, the Treasury Minister cited the avoidance of capital gains taxation and economic double taxation.
Dr Allinson said: “Whilst most distributions by a company are taxable as income in the hands of the Isle of Man resident shareholder, there are a limited number of situations where a distribution is not taxable.
“The primary reasons for this is that taxing distribution would result in the taxation of a capital gain or result in economic double taxation.”
He also emphasised the government’s long-standing policy against taxing capital gains, as outlined in the Tax Strategy 2024-26.
Fairness
Lawrie Hooper challenged the fairness of the policy, asking: “Does he think it is fair that we treat companies differently to the way we treat people?”
He also highlighted disparities in tax treatment, noting: “If a company makes a capital gain and pays that money out to a shareholder, there is no tax paid… but if I, as an individual, make a capital gain and use it to pay my rent, my landlord pays tax.”
Dr Allinson responded: “I don’t think actually that the treatment of capital gains are different between companies and individuals,” directing members to guidance notes on corporate taxation.
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