Interpretation of matrimonial home
Land transaction tax (LTT) is reduced to a flat rate when the transaction relates to the transfer of shares (either joint ownership to sole or vice versa) where those shares relate to the matrimonial home.
The Comptroller is prepared to apply a broad interpretation to 'matrimonial home'. He will, on application, in instances where two people in a relationship have been living as a couple in the property for a period of 12 months or more, be prepared to deem their property to be the 'matrimonial home' whether or not they are married or in a civil partnership.
To benefit from this practice, the couple must attach to the transfer of ownership form a statement of the relevant facts, signed and dated by both parties. The statement should include:
- the names of the parties
- the address of the share transfer property
- the length of time the parties have been in a relationship together whilst living in the property
- a request to be granted dispensation in accordance with this statement of practice
Concession on re-financing
Where certain conditions are met there is a special rate of land transaction tax due if refinancing an existing loan to purchase the property. These conditions are set out at paragraph 3A(2) of the schedule to the LTT Law and include paragraph (f) as follows:
“(f) LTT in respect of the original amount has been paid under paragraph 3”
As LTT is a relatively new tax and therefore in some cases LTT will not have been paid on the original amount secured. The Comptroller is prepared to apply the discretion afforded to him under Article 8 of the Law in these cases and, where all other conditions are met, waive this final requirement.
Taxation (Land Transactions) (Jersey) Law 2009
Application of Article 8(1) of the LTT Law - statement of practice where a secured party takes possession of shares by virtue of a security interest held in accordance with the Security Interests (Jersey) Law 1983
The Comptroller will not require the payment of any LTT in respect of any transfer of shares to which Article 3(1) (a) of the LTT Law applies where the transferee is a secured party with an existing security interest created pursuant to Article 2(3) of the Security Interests (Jersey) Law 1983 (the “1983 Law”), or its nominee, and the transfer is made either for the purpose of:
creating a security interest under Article 2(6) of the 1983 Law
facilitating the exercise by the secured party of a power of sale in respect of the shares
Where this applies, it will not be necessary to make a specific application for the remission of the LTT due.
Application of Article 8(1) of the LTT Law - statement of practice where a secured party takes possession of shares by virtue of a security interest held in accordance with the Security Interests (Jersey) Law 2012
The Comptroller will not require the payment of any LTT in respect of any transfer of shares to which Article 3(1)(a) of the LTT Law applies where the transferee is a secured party with an existing security interest created pursuant to Part 3 of the Security Interests (Jersey) Law 2012 (the '2012 Law'), or its nominee, and the transfer is made for the purpose of facilitating the exercise by the secured party of a power of sale in respect of the shares in accordance with Article 43(2)(a) of the 2012 Law.
Where this applies, it will not be necessary to make a specific application for the remission of the LTT due.
Security Interests (Jersey) Law 2012
Confirmation that statement can be used in lieu of the LTT receipt
The Comptroller will, by concession, consider that in all cases the production of the receipt of the electronic delivery of a statement for a transaction subject to LTT can be treated as an LTT receipt issued under Article 9 of the Taxation (Land Transactions) (Jersey) Law 2009.
The Comptroller may notify a person in relation to a specifically referenced transaction, if in that instance they should not accept the receipt of the electronic delivery of a statement as an LTT receipt. Such a situation would be highly unusual, and would not impact the position if the person had already accepted the electronic delivery of a statement as an LTT receipt.
This concession applies to all situations including to those under Article 42(1A) Companies (Jersey) Law 1991.
Acquiring share transfer property associated with parking and other land
Where a person acquires shares giving that person the right to occupy a particular apartment and that person also acquires connected rights to use one or more parking spaces and other land, such as storage spaces, associated with that apartment, when completing the LTT form, the value of the property should include the amount paid for the apartment, parking spaces and any other land associated with occupation of that apartment.
It is the Comptroller's view that the above valuation methodology applies regardless of whether the rights to use the apartment and associated parking, storage and so on are included within the articles of association of one company, or have been disaggregated between 2 or more companies, for example where someone buys shares in an 'apartment company' and a separate 'parking company'. This reflects the reality that an apartment sold with an associated parking space is worth more than an apartment with no associated parking.
Off-plan purchases: variation of original buyer in agreement
Part 7 of the Finance Law (2024 Budget) Law introduced a new sub-paragraph (2A) after (revised) paragraph 2 of the Schedule to Taxation (Land Transactions) (Jersey) Law 2009 (“LTT Law"). This new sub-paragraph codifies a Direction issued by the Minister of Treasury and Resources in January 2023 that determined chargeable consideration for LTT purposes should be the consideration agreed in a contract, and not market value at the time shares are transferred, where a dwelling is acquired 'off-plan' and certain conditions are met.
Revenue Jersey is aware of instances where a buyer ('original buyer') has entered into an off-plan contract but has been unable to complete that contract for whatever reason and the seller has agreed that a 'new buyer' can step into the shoes of the original buyer ('buyer swap') with no adverse consequences for the original buyer.
If there is any sort of side-agreement, document or understanding, whether in writing or verbal, between the original buyer and new buyer in respect of a buyer swap where consideration passes, the Comptroller is of the view that the value of that consideration should be added to the consideration payable under the off-plan agreement when the new buyer determines and reports the LTT that is due and payable under Article 11(2) of the LTT Law. The new buyer should therefore provide details of any consideration payable in respect of the buyer swap agreement to the Comptroller.
The Comptroller is prepared to consider submissions from the new buyer if they believe LTT due and payable should not be calculated as described above, and if he accepts the submissions, he will reduce the LTT due using the powers available to him under Article 8 of the LTT Law.
Please note that failure to disclose the correct amount of LTT due and payable may result in a minimum level 3 penalty arising (Article 15 of the LTT Law).
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