Guernsey provides a high standard of living, with a good education system, stable government, good infrastructure and a convenient location close to the UK and Europe.

Guernsey is an independent self-governing island and is renowned for being a safe place to live with beautiful beaches, scenery and cliff walks.

For many it is surprisingly easy to become a resident of Guernsey. Individuals with a British or EU passport have an automatic right of abode and can immediately buy and live in any of the many fantastic properties available on the “open market”.

Individuals other than British and EU passport holders can also obtain a right to live here and occupy open market accommodation, via an investor or entrepreneur visa depending on circumstances. Generally individuals who can obtain a “leave to enter” the UK can also reside in Guernsey on making an application to do so.

 

Guernsey is a very attractive place to live because of its proximity to the UK and Europe, its safe environment and easy availability of property. In addition to this, the tax system is relatively benign compared to many other jurisdictions.

Tax residency

Guernsey tax residence is based on the number of days an individual spends in the Island. A “day” is treated as being spent in Guernsey if an individual is in the Island at midnight. There are a number of categories of residence for Guernsey tax purposes:

Resident only

An individual is regarded as “resident only” in Guernsey for tax purposes in a calendar year if he is present in one other jurisdiction for 91 days or more, is also present in Guernsey for less than 182 days and:

(a) he spends 91 days or more in Guernsey during the year, or

(b) he spends 35 days or more in Guernsey in that year and, during the four preceding years, he spent 365 days or more in Guernsey. Individuals who are resident only are, as an alternative to paying 20% on their worldwide income, able to elect to pay a “standard charge”, currently set at £40,000.

This provides that an individual's liability on non-Guernsey source income is satisfied by payment of the standard charge, and the standard charge “franks” the tax liability on up to £150,000 of Guernsey source income.

If Guernsey source income was to exceed £150,000 further tax would be due as appropriate. It should be noted that the same annual charge applies for a married couple as it does for an individual.

Solely Resident or Principally Resident

An individual is solely resident in Guernsey if they are otherwise “Resident Only” as above, save for the fact that they are not also present in one other jurisdiction for the requisite 91 days. An individual will be treated as “principally resident” in a calendar year if:

(a) he spends at least 182 days in Guernsey during the year, or

(b) he spends at least 91 days in Guernsey during the year and, during the four preceding calendar years, he has spent at least 730 days in Guernsey, or

(c) he takes up permanent residence in the Island, is resident only as defined and is solely or principally resident in the following Year of Charge.

An individual who is “solely” or “principally resident” in Guernsey is liable to Guernsey income tax on their total worldwide income at a flat rate after personal allowances and deductions at a flat rate of 20% unless tax capping applies.

Non-Resident

An individual, who is neither resident only, solely or principally resident will generally be non-resident and is broadly only liable to Guernsey income tax on Guernsey source income such as employment or property income. Passive investment income, such as Guernsey bank interest, is generally not taxable.

Tax Capping for Guernsey Residents

It is possible to cap exposure to income tax in Guernsey as an alternative to paying a flat rate of 20%.

The maximum tax liability for any individual who does not have Guernsey source income will be £130,000 per annum.

For those who have both Guernsey and non-Guernsey source income (Guernsey bank interest does not count as Guernsey source income) the maximum tax liability is £260,000 per annum.

It is also possible to cap the non-Guernsey source income at £130,000 and pay 20% on any Guernsey source income if this is beneficial.

With effect from 1 January 2018, a tax cap of £50,000 per annum has been introduced for individuals in their first four years of residence. In order for the tax cap to apply, an individual must meet the following conditions:

  • be principally resident in Guernsey
  • pay £50,000 or more in document duty in respect of an Open Market property purchased on or after 1 January 2018: this is the duty payable on property purchases of £1.32 million or more (£1.5 million to 31 December 2018)
  • make the purchase either 12 months (6 months to 31 December 2018) before or after the date of taking up residence in Guernsey.

A £50,000 tax cap is also available to Alderney residents under specific conditions.

Income from Guernsey land and buildings remains taxable at 20% in addition to any tax cap paid.

Double tax treaty and pensions

Under the terms of the Double Tax Treaty with the UK, pensions are only taxable in the taxpayer’s country of residence. This means that for individuals moving to Guernsey, their UK income tax liability will be replaced by a Guernsey income tax liability and the rate of tax will fall from a maximum 45% to 20% providing a Double Taxation application is submitted to HMRC.

Furthermore, as it is non-Guernsey source, Guernsey tax due on the UK pension income is satisfied by payment of the standard charge for resident only individuals.

In addition it is possible for Guernsey residents to transfer UK pension schemes to a Guernsey scheme.

UK pensions or former UK pensions are classed for Guernsey tax purposes as non-Guernsey source and tax capping may be in point in certain circumstances.

At the start of this article we described some of the non-financial reasons for living in Guernsey and in conclusion we believe that the island, with its picturesque beaches, stunning cliffs, winding country lanes and a way of life that echoes of days gone by, offers much more than just a beneficial tax climate. Guernsey is a lifestyle choice for many where the work life balance is very much in focus.

Team

The business employs 11 qualified Chartered Tax Advisers most of whom have years of experience working in both Guernsey and the UK. 

Fran Snoding CTA
Managing Director fran.snoding@lts-tax.com +44 1481 755881

Fran Snoding CTA

Managing Director

fran.snoding@lts-tax.com | +44 1481 755881

One of the founders of LTS in 2012, Francis began working in the Finance Industry in 1988, is a qualified Chartered Tax Adviser and is a member of the Guernsey Society of Chartered and Certified Accountants, Tax Sub-Committee.

Francis advises individuals who are looking to relocate from the UK to Guernsey and deals with all manner of UK and Guernsey tax issues, the latter expertise being picked up from his time working for the Guernsey Revenue Service. He also advises individuals and companies on the tax issues arising from the transfer of pensions between the UK, Guernsey and further afield.

Areas of expertise

  • UK tax residence and domicile
  • Guernsey tax residence
  • UK property taxation
  • Guernsey general taxation
  • Taxation of pensions

Qualifications

  • Associate of the Chartered Institute of Taxation (CTA)
  • Member of the Association of Taxation Technicians (ATT)
  • Fellow member of the Association of Accounting Technicians (FMAAT)

“Fran” is a late adopter of running having started in his early fifties by taking part in Parkruns and moving up to completing the Great North Run. An avid sports spectator, Fran can often be found supporting the Guernsey Raiders rugby team or shouting at the TV while following QPR or Wasps.

Julian Turian ATT FMAAT
Director julian.turian@lts-tax.com +44 1481 743045

Julian Turian ATT FMAAT

Director

julian.turian@lts-tax.com | +44 1481 743045

Julian joined LTS Tax Limited in April 2019. He brings a wealth of experience in advising high net worth individuals and senior executives on Guernsey and UK tax matters and is highly experienced in advising and commenting upon the practicalities of immigration to, or emigration from Guernsey.

As a board member he is actively involved in the company’s business development and marketing.

Areas of Expertise

  • UK CGT for non-UK resident individuals and corporate vehicles
  • UK and Guernsey taxation of individuals and corporate vehicles
  • Guernsey social security and UK national insurance contributions
  • Wealth planning including use of trusts, corporate vehicles and foundations

Qualifications

  • Member of the Association of Taxation Technicians (ATT)
  • Fellow Member of the Association if Accounting Technicians (FMAAT)

Outside of work, Julian is a season ticket holder at West Ham Utd and enjoys travelling abroad and scuba diving in warmer climates.

David Parrott CTA
Associate Director david.parrott@lts-tax.com +44 1481 743049

David Parrott CTA

Associate Director

david.parrott@lts-tax.com | +44 1481 743049

David joined LTS Tax Limited as an Associate Director in April 2018.

David is responsible for a wide-ranging portfolio of Guernsey and UK based high net worth individuals and corporate entities and specialises in advising those who wish to relocate to Guernsey from the UK or vice versa.

David has a wealth of Guernsey and UK tax experience drawn from his studies and his 18+ years working in the private client sector.

Areas of Expertise

  • Provision of Guernsey immigration and emigration advice
  • Advising on the UK and Guernsey taxation of individuals and corporate vehicles
  • Provision of wealth and UK Inheritance Tax planning advice including the use of trusts, companies and foundations where appropriate
  • Advising on the exposure of non-UK resident individuals and corporate entities to UK Capital Gains Tax

Qualifications

  • Chartered Tax Adviser (CTA)
  • Member of the Association of Taxation Technicians (ATT)

Away from the office, David enjoys spending time with his wife and three young children and plays regularly for a local veterans football team.

Sarah Kenealy CTA
Associate Director sarah.kenealy@lts-tax.com +44 1481 747744

Sarah Kenealy CTA

Associate Director

sarah.kenealy@lts-tax.com | +44 1481 747744

Sarah joined LTS Tax Limited in 2018 and in her current role she is responsible for a wide ranging portfolio of high net worth individuals, corporate and trust clients. She deals with both UK and Guernsey Tax issues and has a particular focus on advising individuals taking up residence in Guernsey

Areas of Expertise

  • UK and Guernsey tax advisory and compliance for individuals and companies
  • Residence and domicile matters, with a focus on individuals moving from the UK or elsewhere to Guernsey
  • Non-resident landlords
  • Capital gains tax for non-UK residents

Qualifications

  • Member of the Association of Accounting Technicians (ATT)
  • Chartered Tax Advisor (CTA)
Garth Van Huyssteen CTA
Manager garth.vanhuyssteen@lts-tax.com +44 1481 755864

Garth Van Huyssteen CTA

Manager

garth.vanhuyssteen@lts-tax.com | +44 1481 755864

Garth joined LTS Tax Limited in December 2018, where he is responsible for a diverse client portfolio including high net worth private clients, trusts, corporate structures and funds.

Areas of Expertise

  • UK and Guernsey taxation of individuals and corporate vehicles
  • UK CGT for non-UK resident individuals and corporate vehicles
  • VAT in relation to UK property
  • UK Corporation Tax
  • Offshore reporting funds

Qualifications

  • Member of the Association of Taxation Technicians (ATT)
  • Chartered Tax Advisor (CTA)

In his spare time Garth enjoys watching and playing sport and has represented Guernsey at the 2018 European Touch Rugby Championships.

Katie Roberts CTA
Manager katie.roberts@lts-tax.com +44 1481 743087

Katie Roberts CTA

Manager

katie.roberts@lts-tax.com | +44 1481 743087

Katie joined LTS Tax Limited in March 2019 and deals with a wide range of UK and Guernsey tax matters including providing services to high net worth individuals and senior executives on Guernsey and UK tax matters and providing tax compliance for Guernsey companies.

Areas of Expertise

  • Capital gains tax for non-UK residents
  • UK and Guernsey tax advisory and compliance
  • UK non-resident landlords

Qualifications

  • Chartered Tax Advisor (CTA)
  • Member of the Association of Taxation Technicians (ATT)

Outside of work Katie enjoys going to yoga classes and running.