Draft budget statement
You can find out about the draft budget statement for 2016 in the news release below.
Draft Budget 2016 presented
Personal income tax amendments
Income tax exemption thresholds
The standard exemption thresholds to be increased by 0.9%. The age enhanced exemption thresholds will remain at the 2015 amount.
Grandfathering of entitlement to age enhanced exemption thresholds
The entitlement to the age enhanced exemption threshold will be limited from the 2018 year of assessment to those who turned 65 before 1 January 2017. Those who turn 65 on or after 1 January 2017 will be entitled to the standard exemption thresholds.
Phasing out lower child allowance from the standard rate calculation of tax
Lower child allowance at the standard rate calculation of tax will be phased out over 3 years from the 2016 to 2018 years of assessment.
Phasing out additional personal allowance from the standard rate calculation
Additional personal allowance at the standard rate calculation of tax will be phased out over 3 years from the 2016 to 2018 years of assessment.
Child care tax relief to be given as a deduction against the 'second earner'
The increase to the exemption threshold within a marriage or civil partnership if the wife or partner works and is entitled to tax relief in respect of child care costs has been changed to a 'second earners' exemption increase from the 2016 year of assessment.
This will mean that the relief will only be available if both spouses or partners are working.
Increase maximum child care tax relief available in respect of pre-school children
The maximum relief that can be claimed will increase from £12,000 to £14,000 from the 2016 year of assessment.
Wife's / civil partner's earned income relief to be given as a deduction against the 'second earner'
The increase to the exemption threshold within a marriage / civil partnership if the wife or 'civil partner B' has earned income will be changed to a 'second earners' exemption increase from the 2016 year of assessment.
This will mean that the relief will only be available if both spouses or partners are in receipt of earnings.
Reduce the benefit in kind exemption
The benefit in kind exemption has been reduced from £1,000 to £250 from the 2016 year of assessment.
Removal of non-residents relief
From the year of assessment 2016 the relief available to non-residents under Article 106 of the Income Tax Law will be removed. This will mean that non-residents will pay 20% tax on all their Jersey source income, unless exempted elsewhere in the law (for example by Article 118B) or by international tax agreement.
Phasing out income deductions is respect of interest payments for main residence
Mortgage interest tax relief will be phased out over 10 years. This will be achieved by a reduction on the cap of the maximum amount of interest that is deductible under Article 90AA of the Income Tax Law.
The interest cap from the year of assessment 2016 remains at £15,000. From the year of assessment 2017 the interest cap is reduced by £1,500 until the cap is reduced to nil for the year of assessment 2026.
Changes to the distribution rules and the taxation of dividends
There were a number of amendments to the distributions rules:
- the entitlement to deduct £1,000 from the amount of a shareholder loan has been removed
- dividends paid on preference shares out of the profits or gains of a company taxed at the standard rate now fall within the definition of a company distribution
- Article 118B(1) (ba) has been amended so that non-residents who receive dividends paid on preference shares where tax has been deducted, will no longer be able seek a repayment of the tax
Voluntary increases in ITIS effective rate
From 1 January 2016 the taxpayer will not be obliged to make their election to voluntarily increase their ITIS rate in writing. This will make law the concession and practice note (Concession P27) that currently allows a taxpayer to voluntarily increase their effective rate by telephone.
Company tax amendments
Repayment of tax credits to 0% companies
A company entitled to claim expenses of management may no longer claim repayments of the tax deducted from dividends.
Calculation of tax credits for 10% companies
The calculation of credits available in respect of dividends received by a company which is taxed at the rate of 10% have been amended.
Company tax filing deadline
The tax filing deadline for companies is confirmed as midnight on 31 December in the year following the year of assessment.
Land transaction tax amendment
Increase in home value threshold for security interest transactions
From 1 January 2016 the home value threshold at which the low value residential property rates apply will be increased to £450,000.
The lower cap at which 0.25% applies on low value residential property will be increased from £300,000 to £350,000
From 1 January 2016 first time buyer rates for creation of security interest transactions are withdrawn.
Calculating your land transaction tax
Commissioners of Appeal amendment
The Comptroller of Taxes will no longer be obliged to attend all hearings of the Commissioners of Appeal in person.