Residency for Jersey income tax

Jersey residence for tax

Most people who live and work in Jersey and spend all their time here except for short visits abroad on business or holiday are resident and ordinarily resident in Jersey for tax. This means they pay tax on all their income from both Jersey and non-Jersey sources.

The following information will help if your tax residency is different to this position. 

Jersey tax residency terms

There are three types of residency status that can apply to an individual.

​Residency status	​Taxation	​Allowances
​Resident and ordinarily resident	​Liable to Jersey income tax on your world-wide income regardless of where it arises. If you pay tax on the same income in another jurisdiction, a credit may be available for foreign taxes paid.	​Apportionment of allowances in the year of arrival/departure based on the date you arrived in/left Jersey Full allowances available otherwise
​Resident but not ordinarily resident	​Liable to Jersey income tax  on all income arising and remitted to Jersey.	​Apportionment of allowances governed by Article 129A of the Income Tax (Jersey) Law (Restricted for each day not spent in Jersey, ignoring exceptional absences e.g. holidays/business trips)
​Non-resident	​Liable on income arising in Jersey with certain exceptions.	​Restricted allowances governed by Article 129B.

Determining residency for tax purposes

Your residency status for the purposes of income tax depends on:

• the length of your visit
• the frequency of your visits
• availability of accommodation in Jersey
  

Residency and moving to Jersey

If you are moving to Jersey permanently or you intend to live here for 5 years or more you will be classed as resident and ordinarily resident for tax purposes from the date you arrive in the island.

If you stay in accommodation which is available for your use even for one night you will be regarded as resident for tax purposes for that tax year.

If you live abroad but visit Jersey on a regular basis i.e. averaging more than 90 nights per year over a 4 year period you will become resident and ordinarily resident from the start of year 5.

Residency and short term contracts

Your tax residency is based on the total length of your contract of employment in the island. Provided that your contract of employment is less than 4 years, you will be classed as resident but not ordinarily resident in Jersey subject to the following conditions:

• if the length of your contract changes your residency position may change, any variation will apply from the date of the change of the contract
• if your contract is extended at any time within its duration, so that you will be living in Jersey for more than 4 years you will become resident and ordinarily resident from the date of the change
  
• bonuses paid whilst living in the island or received after you have left the island are covered in the concession and practice guidance notes
• all cash sums paid by a Jersey employer are taxable including per diems which are paid to cover any incidentals or living expenses
  

Double tax agreements

Jersey holds agreements with certain countries to avoid double taxation on income whilst working in Jersey or abroad.

You will need to check the individual contents of any agreement that applies to you.

UK double tax agreement

An individual who is resident of the United Kingdom will be exempt from Jersey tax on profits or remuneration in respect of personal (including professional) services performed within Jersey in any year of assessment if:

• they are present within Jersey for a period or periods not exceeding in the aggregate 183 days during that year
  
• the services are performed for or on behalf of a person resident in the UK
  
• the profits or remuneration are subject to United Kingdom tax.

If a resident of the UK is required to pay Jersey income tax on their income arising in Jersey, they may apply for a credit for the Jersey taxes paid to be applied to their UK assessment.

Double taxation agreements

Tax and your pension income: living abroad

Intermediary Service Vehicles (also known as Personal Service companies)

The ISV rules apply when you put a company between yourself and the person or organisation that employs you, so that the company receives payment for the services provided rather than you.

In other words, if your company did not exist would the relationship between yourself and the contracting party be that of employer and employee?

Intermediary Service Vehicle income

Meaning of available accommodation

Accommodation is usually considered to be available for your use if you own, rent or lease property in your name and you can use it when you wish.

Property owned or rented by your partner or spouse is normally treated as available for your use.

Accommodation provided by your employer is considered to be available for your use after the end of the second calendar year in Jersey.

Short stays in hotels, guest houses and serviced apartments are not normally considered to be available accommodation.

Remittances of income

Remittances of income include:

• all non-Jersey income paid into Jersey bank accounts whether held in your own name, jointly with another person, or in a third parties name
• income brought into the island as cash
• items brought into the island and then sold
• bills arising in the island but paid from sources of income arising outside of the island, including by credit or debit cards
• your living expenses whilst you visit the island
• any Jersey property maintenance expenditure which includes payments for rates, insurance and mortgage or rents which are funded from overseas bank accounts are also considered to be remitted income
• converting income abroad into investments and then sending those investments to Jersey to convert them to cash

New residents

If you are classed as ordinarily resident for the first time during a calendar year, you will be taxed on your Jersey income for the full year (unless that income is exempted under an international tax agreement), and your non-Jersey income from the date of arrival. 

Assessments on overseas income under Schedule D Cases IV and V will be computed as follows if the:

• source of income ceased before that date of commencement of residence no assessment will be raised.
• income first arose before the date of residence, the assessment for the first year of residence will be restricted to the proportion appropriate to the period from the date of commencement of residence to the end of the tax year.
• income first arose after the date of commencement of residence, the full amount of the income arising in the first year will be assessed.
• source of income ceased between the date of commencement of residence and the end of the first tax year, the assessment will be restricted to the amount of income arising for the period of the date of arrival to the date of cessation of the source.

In the case of an individual becoming resident but not ordinarily resident, they will be treated as resident for the whole of the income tax year. Assessments under Case IV and V will be computed on the remittances in that year whether made before, during or after their physical presence in Jersey in that year.

Leaving Jersey permanently

In the year you leave Jersey, you will be taxable on Jersey income for the whole year (unless that income is exempted under an international tax agreement) and any non-Jersey income up to the departure date if you are ordinarily resident.

If you are resident but not ordinarily resident you will be taxable on your Jersey income for the whole year and remittances to the date of departure.

Apportionment of allowances and exemption thresholds

If you arrive or leave during the year, you may have your allowances and exemption threshold apportioned by the number of complete days you were resident in Jersey per Article 129AA of the Income tax (Jersey) Law.

Income tax legislation

Temporarily abroad

If your ordinary residence is in Jersey and you leave only for occasional residence abroad you will be charged to tax on all your income whether in Jersey or elsewhere. (Article 126 Income Tax (Jersey) Law.) 

Leaving Jersey for longer periods

In the year you leave Jersey you'll be treated as resident and ordinarily resident up to the departure date.

If you are absent from Jersey for a full year or longer your Jersey tax residence will take into account:

• visits to Jersey
• available accommodation in Jersey
  

Employment contract income tax residency flowchart

This flowchart is currently being updated. This is to correct the information that, in line with established practice, an individual who arrives and does not intend to remain in the Island for a period exceeding three years will not be treated as ordinarily resident in Jersey for tax purposes.  

Appendix 1 - Resident and ordinarily resident

​Taxpayer	​Exposure to Jersey tax
​Employee or self-employed	​Liability to Jersey tax on worldwide income, but Double Tax Agreements (DTA's) may have an effect.
​Consultant paid directly by a Jersey entity	​Liability to Jersey tax on worldwide income, but DTA's may have an effect.
​Consultant works for UK Intermediary Service Vehicle (ISV) and payments are made direct to UK ISV	​The ISV will not be liable to Jersey tax assuming that the company is managed and controlled in the UK and there is no permanent establishment in Jersey. The individual will not be liable to Jersey tax in respect of the payments made directly to the ISV but will be liable to tax on attributable profits along with all other sources of worldwide income.
​Consultant with UK ISV and payment made to UK agency that pays the UK ISV	​The UK agency will not be liable to Jersey tax on the assumption that it is UK resident for tax purposes and does not have a permanent establishment in the Island. The ISV will also not be liable to Jersey tax assuming that the company is managed and controlled in the UK (and is therefore UK resident) and that there is no permanent establishment in Jersey. The individual will not be liable to Jersey tax in respect of the payments made directly to the UK agency or on payments made by the agency to the ISV, but they will be liable to tax on attributable profits received from the ISV company along with all other sources of worldwide income.

Appendix 2: Resident but not ordinarily resident

​Taxpayer	​Exposure to Jersey tax
​Employee or self-employed	​Liable on income arising in Jersey and remittances of non-Jersey source income, but double tax agreements (DTA's) may have an effect.
​Consultant paid directly by Jersey entity	​Liable on income arising in Jersey and remittances of non-Jersey source income, but DTA's may have an effect.
​Consultant works for UK Intermediary Service Vehicle (ISV) and payments are made direct to UK ISV	​The ISV won't be liable to Jersey tax assuming that the company is managed and controlled in the UK an there is no permanent establishment in Jersey. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV but will be liable to tax on the attributable profits together with any Jersey source income and remittances to the island of non-Jersey source income. If the individual has suffered UK tax on the income remitted then double tax credit may be available in the Jersey assessment.
​​Consultant with UK ISV and payment made to UK agency that pays the UK ISV	​The UK agency won't be liable to Jersey tax on the assumption that it's UK resident and doesn't have a permanent establishment in the island. The ISV won't be liable to Jersey tax assuming that the company is managed and controlled in the UK and there's no permanent establishment in Jersey. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV, but will be liable to tax on attributable profits together with any Jersey source income and remittances to the Island of non-Jersey source income. If the individual has suffered UK tax on the income remitted then double tax credit may be available in the Jersey assessment.
​Consultant has Jersey ISV company and payment made to Jersey ISV. Jersey company managed and controlled from the UK	​On the basis that the Comptroller accepts that the company is managed and controlled in the UK and there is no permanent establishment in Jersey, the ISV won't be liable to Jersey tax. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV, but will be liable to tax on attributable profits together with any Jersey source income and remittances to the island of non-Jersey source income. If the individual has suffered UK tax on the income remitted then double tax credit may be available in the Jersey assessment.

Appendix 3: Non-resident

​Taxpayer	Exposure to Jersey tax
​Employee or self-employed	​Liable on income arising in Jersey but double tax agreements (DTA's) may have an effect.
​Consultant paid directly by Jersey entity	​Liable on income arising in Jersey but DTA's may have an effect.
​Consultant works for UK Intermediary Service Vehicle (ISV) and payments are made direct to UK ISV	​The ISV won't be liable to Jersey tax assuming that the company is managed and controlled in the UK and there is no permanent establishment in Jersey. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV and will only be liable to Jersey tax on income arising in Jersey (if any) that is not specifically exempted under Article 118(B) of the Income Tax Law.
​Consultant with UK ISV and payment made to UK agency that pays the UK ISV	​The UK agency won't be liable to Jersey tax on the assumption that it's UK resident and doesn't have a permanent establishment in the island. The ISV also won't be liable to Jersey tax assuming that the company is managed and controlled in the UK (and therefore UK resident) and that there is no permanent establishment in Jersey. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV and will only be liable to Jersey tax on income arising in Jersey that is not specifically exempted under Article 118(B) of the Income Tax Law.
​Consultant has Jersey ISV company and payment made to Jersey ISV. Jersey company managed and controlled from the UK	​The company is non-resident under Article 123(1)(a). The company therefore isn't liable to tax in Jersey on the assumption there is no Jersey permanent establishment. The individual won't be liable to Jersey tax in respect of the payments made directly to the ISV and will only be liable to Jersey tax on income arising in Jersey that's not specifically exempted under Article 118(B) of the Income Tax Law.
​Professional sports people	​A professional sports person who is in receipt of money from events taking place in Jersey will be liable to Jersey income tax on the amounts paid to them inclusive of the prize money.