08 June 2011
The Treasury Minister has lodged amendments to the tax laws for new 1(1)(k) residents, to encourage high net worth individuals to bring their businesses to Jersey, creating jobs and boosting economic activity.
If approved, the new regime will remove the distinction between income earned within and outside Jersey. Under the new rules the income for new 1(1)(k)s would be taxed at 20% on the first £625,000 of income and 1% on all income thereafter. This would apply to anyone whose application is made for the first time on or after the date on which the amendment comes into force.
The current regime, which taxes all Jersey income at 20%, discourages 1(1)(k)s from investing in Jersey, because they are taxed more on their Jersey income than on similar investments outside the Island.
Boosting the economy
The proposed changes are designed to boost the economy and increase tax revenues by attracting more wealthy individuals to the Island. These rules should also encourage wealthy people to bring their businesses to Jersey, creating employment and enhancing economic activity in many sectors.
The changes form part of a package of measures intended to increase revenues from the 1(1)(k) regime. In December 2010, at the request of the Treasury Minister, the Housing Minister increased the annual minimum tax contribution required from new 1(1)(k) applicants from £100,000 to £125,000.
Treasury Minister, Senator Philip Ozouf, said, “We need a simple and competitive tax structure to encourage high net worth individuals to bring their investment and businesses to Jersey. People who want to invest in our Island are welcome and we need to do everything we can to let them know that Jersey is open for business.”
“The review of the regime is continuing and further updates will be given in the budget. This is an important first step to encourage more wealthy people to come to the Island.”