Capital gains, corporate and inheritance taxes (FOI)

​Request

A

Could you please confirm an amount for each of the following below of what the tax revenues generated for Jersey would be, for 2016 and 2017, if Jersey had?

i) A Capital Gains Tax of 10%

ii) An Inheritance Tax of 40%, charged on the remaining amount above a threshold of £325,000, same as the UK

iii) A single corporate tax rate of 20% also in line with the UK

B

Could you also provide the same data for High Value Residents as separate values to the rest of the Jersey population?

For further details here is the UK tax information for:

i) Capitals Gains: https://www.gov.uk/capital-gains-tax

ii) Inheritance: https://www.gov.uk/inheritance-tax

iii) Corporates: https://www.gov.uk/government/publications/rates-and-allowances-corporation-tax/rates-and-allowances-corporation-tax

Response

A

i) Capital Gains Tax of 10%

Jersey does not have a capital gains tax regime, and therefore the Taxes Office does not collect or hold the data (for example, capturing the disposal proceeds and acquisition cost information of capital transactions) that would be required in order to provide an estimate of the revenue that could be raised through the introduction of a capital gains tax at 10%.

ii) Inheritance Tax of 40%, charged on the remaining amount above a threshold of £325,000 (same as the UK)

Jersey does not have an inheritance tax regime and therefore the Taxes Office does not collect or hold the data (for example, registering the value of a deceased’s estate) that would be required in order to provide an estimate of the revenue that could be raised through the introduction of inheritance tax on the same basis as the UK.

The Taxes Office does administer the taxation affairs of the Estates of deceased taxpayers, although the data collected in those cases relates only to the income generated within these Estates, as opposed to the capital value of assets, which is the data that would be required for any inheritance tax calculations.

iii) single corporate tax rate of 20% (in line with the UK*)

Historically, profits information has not been systematically collected from all companies tax-resident in the Island / with a taxable presence in the Island. For this reason, the Taxes Office cannot accurately estimate the revenue that could be raised through applying a corporate income tax rate of 20% to all such companies. It must also be acknowledged that changing the corporate tax rate in the manner outlined in the question would result in a marked change of behaviour.

* Since 1 April 2017, the UK’s corporation tax rate has been 19%.

B

It is assumed the question refers to individuals who come to Jersey by obtaining “entitled status” under Regulation 2(1)(e) of the Control of Housing and Work (Residential and Employment Status) (Jersey) Regulations 2013. By virtue of this status, these taxpayers are able to access preferential income tax rates. For the same reasons as above, the Taxes Office does not collect or hold the data to be able to estimate potential revenue that could be raised through the introduction of a capital gains or inheritance tax.