Taxation & Legislation

The States of Guernsey delegates most tasks to departments, which each have responsibility for particular areas of government.

States Income Tax is responsible for the collection of tax and the enforcement of the tax legislation. The care and management of the Income Tax Law is the responsibility of the Director of Income Tax.

For income tax purposes, Guernsey comprises all the islands in the Bailiwick, except Sark.

How much tax will you pay?

Income tax is a flat rate of 20 per cent after fairly generous personal allowances of roughly £15,000. The island has no tax on capital gains, inheritance or sales.

There are three rates for companies, depending upon the source of income. The rates are:

• Company Standard Rate – 0% (income from businesses, offices and employments and other sources)
• Company Intermediate Rate – 10% (income from banking business)
• Company Higher Rate – 20% (income from trading activities regulated by the Office of the Director General of Utility Regulation, and income from the ownership of lands and buildings)

There is no separate corporation tax. Guernsey levies no capital gains, inheritance, capital transfer, value added tax or general withholding taxes.

The ideal location for banks, accountants, lawyers and more

The plethora of offices of private banks, accountants and lawyers in St Peter Port illustrate how financial services are the bedrock of the Guernsey economy.

Robert Shepherd, managing partner of Guernsey law firm Ozannes, says the island has seen an increase in interest from wealthy UK residents keen to avoid the new higher tax rate – and Guernsey is an alluring destination for many looking to relocate their families.

The currency is sterling, the time zone is the same and transport links to Britain and Europe are excellent.

A flourishing low-tax environment

The constitutional position of Guernsey has allowed a low-tax environment to flourish. It is a dependency of the UK Crown, but has the right to legislate independently on domestic matters such as taxation.

Internationally, it is not technically part of the UK or European Union, though it has a special trading status within the EU.

For more information visit www.gov.gg.