After months of sustained rhetorical and political pressure being brought to bear on international financial centres it might be expected that these jurisdictions are looking ahead with a certain amount of trepidation. Not so the Isle of Man which, according to the UK Crown Dependency’s assessor of income tax, is looking towards a bright future.

Following the credit crisis the UK government has been examining its relationship with British offshore centres, not least to squeeze the amount of money they receive from the treasury and to ensure that these jurisdictions are running their affairs competently.

Under The Foot Review, the Isle of Man has been placed under the microscope along with Guernsey, Jersey, Anguilla, Bermuda, the British Virgin Islands, Gibraltar, the Caymans and Turks & Caicos. While some emerged well from such scrutiny, one centre in particular was found to be seriously lacking: the Turks & Caicos Islands were notoriously brought back under direct UK rule when widespread corruption was uncovered within its government. In contrast, those centres which made the grade in terms of compliance and cooperation must surely be anxious to put the demonisation of offshore centres behind them and look to future growth.

On the sidelines of “The Future of Onshore and Offshore Financial Centres” conference in London, Malcolm Couch, assessor of income tax in the Isle of Man, told WealthBriefing that the outlook is particularly good for the island’s wealth management industry. This, he explained, is to an extent due to the 2006 introduction of a tax cap covering income from the entire assets of high net worth individuals. Thus far, 90 people have taken advantage of this facility, he said, and he anticipates many more HNW individuals will choose to domicile their wealth on the Isle of Man going forward. In addition, the Isle of Man has no capital gains tax, inheritance tax or stamp duties, he said.

Asked if the partial breach of Swiss banking secrecy will erode the appeal of the Alpine state – to the benefit of centres such as the Isle of Man – Mr Couch agreed that there was a general feeling the island would benefit. However he was keen to emphasise that wealth management was only one area of the Isle of Man’s particular body of expertise and there was still plenty of scope for the centre’s wider financial services industry to grow.

“Wealth management is one of the Isle of Man’s unique selling points,” said Mr Couch, adding that although local firms in this sector are currently at full capacity there is “still capacity to grow.” He went to draw comparisons to Singapore, pointing out that the Isle of Man is similar in landmass, indicating perhaps that the Island is looking to garner the same international standing as the City State.

The Isle of Man has certainly come to international prominence this year for being a frontrunner in demonstrating tax transparency; not only did the jurisdiction make the “first cut” of the Organisation for Economic Development’s “white-list” of centres which meet agreed standards, but the island is also a member of the OECD’s peer review panel.

In Mr Couch’s view, the Isle of Man has “kept breaking the mould and leading the way on tax issues”, and in this way “people can see we’re absolutely ‘blue riband’.” He also emphasised the importance of the centre’s involvement with the OECD, because this allows the Isle of Man to articulate its position clearly and “it is essential that smaller jurisdictions have as much clout as the bigger ones.” Furthermore, not only has OECD involvement allowed the Isle of Man to contribute intellectual capital to the debate on international tax standards, but it has also delivered promotional gains by showing how seriously the island takes its position as a financial centre, he said.

Offshore financial centres have come under intense pressure this year following the G20’s April pledge to put an end to bank secrecy and the Organisation for Economic Cooperation and Development’s “black-listing” of non-compliant jurisdictions. And while Mr Couch is resolutely upbeat for the Isle of Man’s prospects, he foresees that uncooperative offshore financial centres may soon suffer the full wrath of the international community over tax evasion. “Such jurisdictions will be facing sanctions, probably at the next G20 meeting,” he said.