The island of Pabay (57 16N 05 51.5W and NGR 675270) is located 2.5 miles from the village of Broadford on the South side of the Isle of Skye. It is 360 acres in size, diamond shaped and predominately flat, the highest point being 28m above sea level with cliffs on the North and East shores.

Pabay is known worldwide for its unique geology consisting of fossils, Pabba shale and other features. Due to the inaccessibility of the island it has escaped the impact of modern farming methods. A fully modernized home with its own electricity supply (both diesel and wind power) is located on the South side of the island together with numerous farm buildings. Access to the island can only be made by boat or helicopter.

The name Pabay is derived from an old Norse word (the Norwegians ruled this part of Scotland for many years around 1000AD) meaning "priest's isle" and there are the remains of a 13th century chapel. In the past the island was completely wooded and the tree planting scheme now underway will return Pabay to its original sylvan state.

The Island of Pabay has been issuing its own stamps since the mid-twentieth century. This is the first coin issued by the Island of Pabay; this issue has been officially authorized by the current owners of the island.