Taxation of residential benefit in kind (FOI)
Taxation of residential benefit in kind (FOI)Produced by the Freedom of Information office
Authored by Government of Jersey and published on 03 September 2018.
Prepared internally, no external costs.
There are now two routes to attain immediate 'Entitled Status' without the need to live in Jersey for 10 years.
The first is the well understood High Net Worth Individual (HNWI) / High Value resident (HVR) route where a clear benefit to the Island in commercial and / or social metrics must apply and then a minimum tax payment of approximately £125,000 is applied, (before additional value that may accrue but is not mandated)
The second is through a Ministerial decision where there is a clear benefit to the Island in commercial and / or social metrics, but without the financial requirements that apply to HNWI / HVRs as the salaries involved are unlikely to achieve that level of tax demand.
In the second case a clear 'Benefit in Kind' that is not part of the exemptions to this aspect of Income Tax, exists that can have a value applied to it given the HNWI / HVR requirements. For clarity, during the ten year period one recipient is required to pay £125,000 per year the other will pay tax at (probably) 20% on salary, which at, say £250,000 pa would create a £50,000 tax demand. This gives a £75,000 pa differential in tax demand between the two equally 'beneficial' new 'Entitled' residents. It would appear that this is a definition of value for a 'Benefit in Kind'.
For non-HNWI / HVRs being given immediate 'Entitled Status' without ten year residency , how does the Income Tax Department intend to tax this 'Benefit in Kind', to maintain equivalence between the two types of recipients, and also maintain equivalence to those required to undertake ten years residency?
The fact pattern in this Freedom of Information request applies only to one specific situation where a public Ministerial Decision was issued - Reference, MD-C-2017-0128, “Application for residential and employment status under Regulation 2(1)(e) of the Control of Housing and Work (Residential and Employment Status) (Jersey) Regulations 2013”.
This Ministerial Decision relates to an identifiable person, being the States Chief Executive, Charlie Parker. The information within that Ministerial Decision is a matter of public record and explains the decision and the reason for the decision.
Any further information in relation to this particular decision is exempt under Article 25 (Personal Information) of the Freedom of Information (Jersey) Law 2011.
Article 25 Personal information
(1) Information is absolutely exempt information if it constitutes personal data of which the applicant is the data subject as defined in the Data Protection (Jersey) Law 2005.
(2) Information is absolutely exempt information if –
(a) it constitutes personal data of which the applicant is not the data subject as defined in the Data Protection (Jersey) Law 2005; and
(b) its supply to a member of the public would contravene any of the data protection principles, as defined in that Law.