A guest blog by Advocate Paul Beckett M.A., M.St. (Oxon.), Visiting Research Fellow, School of Law, Oxford Brookes University.

On 1 December 2022 the Isle of Man Government opened a public consultation on “assisted dying”, discreetly avoiding any reference to assisted suicide.One of the most divisive issues of our times, assisted suicide is defended and opposed with equal vehemence, and moral, ethical and legal arguments all fuel the debate over the right to ‘self-determination’. Euthanasia and assisted suicide, killed by medical professionals or killed by one’s own hand, lead to very much the same result: death.

Many countries have legalised euthanasia or assisted suicide.What sets the present Isle of Man consultation apart is not its thoughtful balancing of the emotional and clinical issues on which it seeks public comment, but something which is not stated, because it is self evident. This debate concerns euthanasia in a low tax jurisdiction.

Where there is death, there is a phalanx of tax planners eager to advise. For both onshore and offshore tax residents, there are heavyweight fiscal arguments to consider.Putting the ethical issues to one side, is there are danger that euthanasia could be hijacked – repurposed to serve the needs of death tax planning?

Leaving a low tax area, intending to be euthanised.

Picture a scene in which someone has relocated from their home country, in this case the United Kingdom, which is their domicile of origin, to the Isle of Man, their new domicile of choice. They are tax resident in the Isle of Man. Then imagine that because euthanasia is not yet available in the Isle of Man, this person will travel to Switzerland in order to end their life.

By leaving the Isle of Man for Switzerland with the sole intention of carrying out an assisted suicide, the Isle of Man – to which they are clearly not returning – is no longer their domicile of choice. For Switzerland to become their new domicile of choice, they would need to meet Swiss tax residence requirements. An individual is deemed to be a tax-resident under Swiss domestic tax law, if:

• the individual has the intention to permanently establish his/her usual abode in Switzerland, which is usually where the individual has his/her centre of vital interest, and is registered with the municipal authorities, or if
• the individual stays in Switzerland with the intention to exercise gainful activities for a consecutive period (ignoring short absences) of at least 30 days, or if
• the individual stays in Switzerland with no intention to exercise gainful activities for a consecutive period (ignoring short absences) of at least 90 days.

But they are merely visiting in order to die, and none of these criteria is met. In this limbo, their default domicile for taxation purposes becomes once again their domicile of origin; the United Kingdom. The impact on a lifetime’s careful savings could be considerable, not to mention the consequences for family left behind.

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Moving to a low tax area, intending to be euthanised.

Now assume that euthanasia has become legal in the Isle of Man. The Isle of Man Government consultation explains the aim of the proposed legislation to be:

• to enable mentally competent adults who are terminally ill to be provided with assistance to end their life at their request.
• A person is deemed to be terminally ill if a registered medical practitioner has diagnosed them as having a progressive disease, which can reasonably be expected to cause their death.
• The person must be 18 years of age or over and is a permanent resident on the Isle of Man.

“A permanent resident on the Isle of Man” – would this not, as in Switzerland, be an impediment to someone wishing to be euthanised who attempts to abandon their domicile of origin in the United Kingdom or (having earlier abandoned their United Kingdom domicile of origin) their domicile of choice elsewhere, by relocating to the Isle of Man? Would they also be in limbo, unable to establish that the Isle of Man had become their “permanent residence” and hence their domicile of choice in which they were tax resident. Would they remain domiciled in (or would their domicile revert to) the United Kingdom?

Not necessarily. There is no definition of residence for tax purposes in the Isle of Man.[1] The Isle of Man treats those individuals having a view or intent of establishing residence as tax resident from the date of their arrival. The Assessor of Income Tax will look at evidence showing that the presence in the Isle of Man is not for a temporary purpose.

Intending to live in the Isle of Man for the rest of one’s life is hardly a temporary purpose. And in any case, one’s appointment with death may be booked after residence has commenced. There is no compulsion to reveal advice received or their innermost thoughts and intentions. The Assessor of Income Tax can hardly ask a new resident how long they plan to remain among the living.

Death tax planning – euthanasia repurposed.

The result? In the hands of international wealth and tax planners, euthanasia will have been repurposed. The Isle of Man, as a low tax jurisdiction with ill-defined tax residency rules, may become the destination of choice for a steady stream of tax-advised, terminally ill individuals. The Isle of Man is gentle and welcoming, and there are far worse places in which to spend one’s final days. But what will be the social impact on the island and on the island’s reputation abroad of what amounts to death tourism?