For individuals and families considering relocating to Guernsey, plans set out in the island's annual budget, which was approved on 8 November last year, are positive news.
One of the proposals is the implementation of an income tax break for new residents who spend at least £1.5 million on an Open Market property (giving rise to a Document Duty take of £50,000 or more). The house must be acquired within six months either before or after the date on which the individual takes up permanent residence in Guernsey and the individual must not have been resident in Guernsey at any time in the previous three years prior to the purchase.
The new tax cap will be available for the year of charge in which the individual takes up permanent residence and will then apply for the following three years. This is a substantial reduction from the longer standing caps of £110,000 on non-Guernsey source income and £220,000 on worldwide income, and it is hoped it will stimulate the Open Market. The proposals apply from 1 January 2018.
Guernsey's Government (the States of Guernsey) put forward the initiative as part of its 'Future Guernsey' manifesto, a document that outlines its long-term vision for the island's prosperity. The core objective is to make the island 'one of the healthiest and happiest places in the world' by focussing on four key areas:
- Quality of life
- Community
- Guernsey's place in the world
- The economy
Along with the new tax incentive, proposals include making sure there are reliable and affordable sea and air links, and removing barriers for businesses while maintaining the island's high standards of regulation.
A new population management law came into force in April 2017, simplifying the relocation process, providing a more logical and flexible framework and further helping to broaden Guernsey's appeal to individuals, families and businesses.
If you are considering relocating to Guernsey, you are advised to talk to a member of our team at the start of the process in relation to your personal, business and tax affairs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
