The standard rate of income tax in Jersey is 20%. This rate is applicable both to individuals and corporate entities, as well as partnerships and branches of overseas companies. For high net worth individuals, there is a preferential tax rate available.
The Island has no separate corporation tax code, although Jersey has now introduced a ‘zero / ten’ corporation tax regime. Under ‘zero / ten’, companies are generally taxed at 0% and there is a special 10% rate applying to certain regulated financial businesses. These changes are now in place and, in general terms, apply from 2009 year of assessment for companies.
There are no 'wealth' taxes such as capital gains tax or inheritance tax.
Other attractions of the Jersey tax system include generous rules for the taxation of employee share ownership; capped Social Security payments; no stamp duty on equity transactions; and an excellent working relationship between the finance industry and the Taxes Office which promotes openness and economic growth.
High Value Residency (HVR)
A key consideration in the granting of a HVR licences is the expected level of annual tax contribution to be made by the applicant. To meet the current requirements, applicants would normally be expected to generate sufficient income so that - at the present rates of tax - their annual tax contribution is in the region of £125,000. As part of the application process consideration will be given to the total net worth of the applicant, in order to be satisfied that the applicant has sufficient wealth to generate the expected future tax revenues.
With effect from 1 July 2011, HVR individuals that are new to the Island will be taxed on the following scale:
- the first £625,000 of world wide income (including Jersey based) will be taxed at 20% thereby accruing the £125,000 per annum minimum tax contribution
- all personal income over £625,000 will be taxed at 1%
The object of the reduced tax is to attract high net worth individuals to invest their wealth in the Island.
For confidential and free advice about any aspect of high value residency in Jersey, please visit the Locate Jersey website or contact our Director of High Value Residency.
Locate Jersey website
Non-High Value Residents (HVRs)
Non-HVRs do not have to agree a minimum income tax contribution with the authorities. These individuals are subject to Jersey's general income tax rules and will pay tax at a standard rate of just 20% on their worldwide income (including Jersey source income).
In many instances, managers will also benefit from the favourable ‘benefits in kind’ rules that apply, for example, to share incentive schemes and proprietary investments in funds managed by them. Generally, any initial benefit obtained when purchasing such shares will be taxable but the subsequent growth in value will be free of Jersey tax. Taken together with the Social Security benefits, this means the tax treatment of such benefits in Jersey is far more attractive than, for example, the UK.
Social Security payments in Jersey are low compared to many jurisdictions and payroll savings can, threfore, be made by moving to Jersey.
Income tax (for individuals) (taxes and your money section)
People in employed work - class 1 contributions (employment and careers section)
Self employed class 2 contributions (employment and careers section)
General business taxation
The standard rate of taxation (20%) applies to the tax adjusted profits of the businesses of sole traders and partnerships.
The basis of company taxation has changed since 3 June 2008 in respect of companies incorporated after that date and from 1 January 2009 in respect of all other companies resident in Jersey.
Prior to these dates companies were also liable on their tax adjusted profits at the standard rate of 20%. From these dates companies have been taxed under the zero / ten corporate tax regime.
The standard rate of corporation tax from the inception of the zero / ten regime is 0%. The exceptions to this standard rate are financial services companies (as defined within the income tax law) which are taxed at 10% (hence zero / ten) and utility companies that continue to be taxed at 20%. It is worth noting that any of these companies will be liable to tax at 20% on any income specifically derived from Jersey rentals or Jersey property development.Income tax (taxes and your money section)