The main taxes are income tax at one rate of 20%; social security contributions are also payable. If you are just getting started, try this overview of Accountancy on Guernsey.LinksKey Calendar Dates - for accountancy on GuernseyAccountancy - Frequently Asked QuestionsContact - Collenette Jones. Guernsey – a tax efficient jurisdiction Guernsey is a leading international financial centre with a good reputation and excellent standards: The general rate of tax payable by Guernsey companies is zero*. Capital Gains Tax is now a consideration for Guernsey residents when investing in UK residential property. Please contact us for a no obligation discussion of your accounting needs. A 10% rate of corporation tax is applicable to income arising from certain regulated activities including banking and insurance. But buying a home isn’t easy in this 30-square-mile tax haven. Unless you already complete UK self assessment tax returns, and tax due also needs to be paid within this timeframe. For an Alderney resident their "Alderney qualifying income" is income from all sources, regardless of where it is from, except for any income from Guernsey/Alderney land and property, which is taxable in addition to the cap. In brief, Capital Gains Tax (“CGT”) may be charged on a non-UK resident who sells a residential property of any value, where the sale is completed on or after 6 April 2015. The content is current on 1 January 2020, with exceptions noted. HMRC have historically been disinclined to accept estate agent’s opinions, and many people consider that a relatively inexpensive report from a Chartered Surveyor is a worthwhile investment where substantial pre-April 2015 gains exist. Sections 39B, 39C, 39D and the Sixth Schedule of the Income Tax Law limit the amount of tax payable by an individual resident in Guernsey/Alderney. The type of valuation you need to obtain will depend on individual circumstances. Discover more about our accounting services and talented local staff team. This is usually on the bias of a non UK resident individual or entity. From 6 April 2015, UK CGT will be paid by non-residents in the same way that it is paid by UK residents. It’s the gain you make that’s taxed, not … Showers die out tonight with fair periods. Company tax. or Guernsey is to remain on Netherlands' list of low-tax jurisdictions for the purposes of enforcing certain anti-tax avoidance rules, the Dutch Ministry of Finance announced. A summary of the tax caps and the impact these will have on your Social Security Contributions are provided below. We provide a total suite of accounting, assurance, tax, company formation and administration, payroll, pension and trust services under one roof. Certain specified activities in Guernsey are taxed at higher rates. It is possible to elect for alternative treatments, but in the majority of cases this will be your “base cost” for the purposes of calculating any tax liability on sale – only an increase in value after 6 April 2015 is taxable. Guernsey does not levy a tax on capital gains. Individuals will receive the same annual CGT allowance that is available to UK residents – for the 2015/16 tax year, this means that the first £11,100 of any gain will be exempt from tax. In Guernsey there is no general capital gains tax, inheritance tax or estate duty, purchase or sales tax, VAT or capital transfer tax. Areas of Expertise. Proposed changes to rates of capital gains tax in the UK could well provide another reason to consider relocating to Guernsey. No Guernsey income (other than bank interest) can be taken into account in this cap, so if you do have other income from Guernsey you will need to pay tax at 20% on this in addition to the £130,000 (subject to a further cap on qualifying and non-qualifying income - see below). Guernsey does not levy an inheritance tax. It might be a slightly cynical point of view, but that is nonetheless what the UK Government have done by extending the scope of Capital Gains Tax to non-UK residents who own residential property situated in the UK. Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. Please re-authenticate to start a new secure session. From 1 January 2018, a new resident to Guernsey (who has not been resident in Guernsey in the previous 3 years) may claim a tax cap of £50,000, for the year they arrive in Guernsey and the following 3 years. Your session has expired. The staff will need be told the nature of the new business, the date of commencement and, if possible, an estimate of profits for the first year of trading. If you are able to take advantage of the cap, you don't need to complete the personal return each year with details of all of your income, but you can complete a Tax Cap form which is only 1 page long. Deductions and allowances– Personal allowances are available to the taxpayer and his/her spouse/civil partner. Guernsey Property Unit Trusts (GPUTS) are a frequently used vehicle for holding UK real estate. Most importantly, speak to us before you sell. Guernsey has a favourable personal and corporate tax regime with no Capital Gains, Inheritance or Value Added Taxes. The limit of tax payable on this income is £130,000 for 2019. Guernsey has introduced zero basic rate corporation tax on profits arising on most business carried out on the Island. If you are self-employed, non-employed, or over pension age and elect to take advantage of the Tax cap, you will be assessed at the maximum weekly rate for the payment of Social Security contributions. The definition of “high value” was initially set at £2 million, but has been extended on more than one occasion and will include all properties valued at £500,000 or above with effect from 6 April 2016. We are a Guernsey based firm of Chartered and Certified Accountants providing a high level of service to Bailiwick of Guernsey clients. A return must be made to HMRC to inform them of the sale, and provide a computation of any gain arising, within 30 days of completion of the sale. With its … There is no capital gains tax, inheritance tax, value added tax or withholding tax. This article touches on some of the key points local residents might want to bear in mind, the rates of tax applied to capital gains made by individuals and companies, and simple steps that can be taken to protect historic gains from the hands of the UK tax-man. Penalties apply where the return is not submitted on time (even if there is no tax liability). Cantonal and municipal taxes are imposed on both types of property. Guernsey has a basic rate of corporation tax of 0% on profits arising applicable to most companies which are Guernsey tax resident. The official website for the States of Guernsey. As expected it suggested the Government considers realigning current CGT rates with personal tax rates – potentially increasing the rate of the tax from 28 per cent to 40 per cent (in some cases 45 per cent) for a higher rate tax payer. Neither Collenette Jones Limited nor its directors or employees accept any responsibility for loss or damage incurred as a result of acting or refraining to act upon anything contained in or omitted from this document. Crossways Trustees Limited is licensed by the Guernsey Financial Services Commission. Keep up-to-date on significant tax developments around the globe with EY’s Global Tax Alert library. Guernsey has a very favourable personal and corporate tax regime, with no general capital gains tax, inheritance tax or estate duty, purchase or sales tax, VAT, capital transfer tax or council tax. UK Chancellor Rishi Sunak recently commissioned a report which recommends a major overhaul of capital gains tax or CGT. At present, the new rules do not extend to commercial property such as shops, factories, warehouses, etc. Collenette Jones is the trading name of Collenette Jones Limited and Crossways Trustees Limited. A resident of Alderney, who hasn't previously been capped as above, will be capped at £50,000 on their "Alderney qualifying income", for each year from 2016 to 2025. If you own, or are thinking of investing in, UK residential property and would like to discuss how these rules impact on your particular circumstances, please get in touch with me. Mr C is resident in Alderney and has the following income, he has not previously been capped, UK investments                    £ 150,000, French income                      £ 50,000, Total                                          £352,000, Guernsey rent                           £12,000 at 20% £ 2,400, Total tax due                             £52,400. Net wealth/net worth taxes. Gains from selling private property are not federally taxable while gains from business property are taxed as income. Of course, Switzerland taxes capital gains on other investments as income, but foreigners may be able to avail of a flat tax scheme as well. As a self-governing British Crown Dependency, the island’s own system of taxation offers a long-standing, competitive regime that meets OECD standards of transparency and information … Property owners and occupiers may be … Guernsey does not have CGT. Consumption tax. *some browsers' menu buttons may vary. The rules intend to capture disposals of residential property in the United Kingdom by all non-residents. VAT. Capital gains tax. It is a legal requirement for new businesses to inform the Revenue Service office. Katie joined LTS Tax Limited in March 2019 and deals with a wide range of UK and Guernsey tax matters including providing services to high net worth individuals and senior executives on Guernsey and UK tax matters and providing tax compliance for Guernsey companies. Details: Capital gains in Guernsey are not subject to tax. The income tax position for fund vehicles is detailed below. No Guernsey income (other than bank interest) can be taken into account in this cap, so if you do have other income from Guernsey you will need to pay tax at 20% on this in addition to the £130,000 (subject to a further cap on qualifying and non-qualifying income - see below). Guernsey has a formidable reputation for being well-regulated and is highly respected across the world. Sign In. We provide a total suite of accounting, assurance, tax, company formation and administration, Moving forwards, it will be important to retain receipts for any substantial improvements to property that might increase its capital value such as, for example, an extension or replacement of a lean-to with a new conservatory – these costs can be deducted when calculating capital gains on sale. During the 2015/16 tax year, for an individual, the higher rate will be charged once total taxable income and gains (calculated after deducting any available tax-free allowances) exceed £31,865. In general, this Tax Guide does not reflect any COVID-19 tax policy measures. Guernsey levies no capital gains, inheritance, capital transfer, value added or general withholding taxes. The menu button may look like Capital gains– There is no capital gains tax. The three tax rates for companies in Guernsey are as follows: Company Standard Rate – 0%, income from … Guernsey does not levy any value added, goods and services or consumption taxes. Switzerland, one of the world’s renowned centers of banking and stores of wealth, makes the list with no capital gains tax on trades of securities. This article has been prepared as a general guide. Inheritance Tax. But local residents who own residential property or other chargeable assets in the UK could potentially liable to pay the increased rates should the tax rise in the coming months. Preparation of tax returns. They’ve evolved in the decades since, but still include 0% tax on most company profits, a flat income tax rate and no inheritance, wealth or capital gains … The tax situation for Guernsey residents is as follows: 20% Income Tax(with generous allowances) NO Capital Gains Tax If you have enough income to qualify for the tax cap, you won't be given any personal allowances. The Guernsey income tax year is the same as the calendar year, 1st January and ending on 31st December. Capital gains tax for non-UK residents In this instance, if their assessable income is below the maximum amount of £149,760 they should provide details of their worldwide income (for the relevant year of charge), so that this can be considered for the basis of their contribution liability. The definition of “residential property” is wide and, to all intents, includes any building that a person can live in. We all realise that we live in a world where governments have for many years spent more than they have earned, and are trying to balance their books in an environment where household incomes are squeezed. Capital Gains Tax calculator for tax year 2020/21. It is worth noting here that companies may be exposed to other taxes that do not apply to individuals, particularly the Annual Tax on Enveloped Dwellings (“ATED”). Increasing capital gains tax rates to bring them into line with income tax could raise £14 billion for the Treasury, a report commissioned by Chancellor Rishi Sunak has suggested. If you have a high level of income from both in and outside of Guernsey, or just Guernsey income, then the maximum tax that you pay is capped at £260,000 for 2019 (but this does not include income from land and property in Guernsey; tax is payable on this income in addition to the cap). The remainder of the gain will be taxed at 18% or 28%, depending on the total UK income and gains arising in the year. Please see our general guide to Guernsey income tax [258kb] for more information. Guernsey, an island in the English Channel, has a cap on income tax and no inheritance or capital-gains taxes. This cap can only be claimed if the individual has paid £50,000 or more in document duty on the purchase of a property, that is on Part A of the Open Market Register, and that property is purchased within 12 months (either before or after) they take up permanent residence in Guernsey. by husband and wife), each owner will be entitled to an annual allowance and basic rate (18%) tax band (in 2015/16, this would mean that the first £22,200 of any gain was exempt from tax). Income tax is generally a flat rate of 20%. With the cap applied, his tax bill would be: Qualifying income - tax capped at £130,000, Non-qualifying income          - £15,000 taxed at 20% £ 3,000, Total tax due                             £133,000. In Guernsey, in respect of income tax, for any year of charge beginning on or after 1 January next following the entry into force date. The Guernsey tax year runs from 1 January to 31 December and for individuals who are both Guernsey and UK resident, ... personal and corporation tax, capital gains tax and inheritance tax. Companies are taxed at a flat rate of 20% on the entire gain – there are no tax-free amounts for companies, but they are entitled to claim an “indexation allowance” (effectively, increasing the initial purchase price in line with inflation). Capital gains tax. The limit of tax payable on this income is £130,000 for 2019. The Dutch blacklist contains eight jurisdictions that are currently banned by the EU, as well as a further 15 low-tax jurisdictions, including Guernsey, Jersey and the Isle of Man. The majority of persons owning UK residential property, either as an individual or via a company, will almost certainly be affected by the changes, which came into effect on 6 April 2015. A tax rise is never popular, so what could be better (from the Government’s point of view, at any rate) than inflicting one on somebody who cannot vote against you? The tax cap is based on the level of "qualifying" and/or "non-qualifying" income you have. This article touches on some of the key points local residents might want to bear in mind, the rates of tax applied to capital gains made by individuals and companies, and simple steps that can be taken to protect historic gains from the hands of the UK tax-man. In addition, the capital gains tax liability of a company that is subject to ATED is calculated at a rate of 28%. If you have owned UK property for a number of years, the most important point is to obtain an opinion of its value as at 5 April 2015. Mr B is resident in Guernsey and has the following income, UK investments                         £ 350,000, French income                           £ 640,000, Guernsey Bank Interest            £ 10,000, Guernsey wages                           £ 425,000, Guernsey rental income              £ 19,000, Guernsey loan interest                £ 250,000, Total                                                £ 1,694,000, Qualifying and non-qualifying income - capped at £260,000, Tax on Guernsey rental income           £19,000 at 20% £ 3,800, Total tax due                                            £263,800. Levy any value added, goods and services or consumption taxes, UK will. 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