Guide to Individual Tax in Guernsey

Guernsey is a well-known island that serves as a top center for international finance. It has a strong reputation and high standards. Guernsey provides services for businesses and individuals, making it a popular choice for families seeking to manage their wealth internationally.

Guernsey, a part of the Channel Islands, is located near France in the English Channel. It offers a mix of British culture and the advantages of living abroad. Despite its proximity to the UK, Guernsey governs itself, with its own elected parliament making its laws, taxes, and budget decisions.

Taxation of Individuals in Guernsey

In Guernsey, for income tax purposes, individuals are categorized as Resident, Solely resident, or Principally resident. These classifications are determined primarily by the number of days spent in Guernsey during a tax year, and in some cases, may also consider the number of days spent there in several preceding years.

• Resident: An Individual will be treated as a "Resident" if he/she is in Guernsey for 91 Days or more in a Calendar year, or if he/she is in the island for 35 days or more and he/she has been in Guernsey for at least 365 days in the previous 4 years.
  
  
• Solely Resident: An Individual will be treated as "Solely Resident" if he/she is a Resident of Guernsey and he/she is not a resident of any other jurisdiction for the year. 
  
  
• Principally Resident: An Individual will be treated as "Principally Resident" if he/she was physically present in Guernsey for 182 days or more in a year OR,

If he/she was physically present in Guernsey for 91 Days in a year and during the four previous years, the individual has spent 730 days or more in the Island OR, 

The Individual takes up permanent residence in Guernsey. 

Resident:

If you are considered a resident of Guernsey, you must pay tax at 20% on all the money you earn anywhere in the world. The personal allowance in Guernsey is £13,025. However, if you choose, you can pay a Standard charge instead. If you are in Guernsey only for work, there are some exceptions to this rule.

If your main purpose for being in Guernsey is work and your income comes mainly from this job (excluding bank interest), you will only be taxed on the income earned in Guernsey and any income brought into the island. You will also receive a share of personal allowances based on the number of weeks you spend in Guernsey.

Solely or Principally resident: 

If you are solely or principally resident in Guernsey you will pay tax on your total income wherever it is from. You may be able to claim for tax paid in another country with the help of DTA (Double Taxation Arrangements). 

Attractive Tax Features: 

• "Resident" individuals can elect to pay standard charge instead of normal tax. If you decide to pay the standard charge (currently £40,000, previously £30,000), you won't have to pay additional tax on income outside Guernsey. However, you'll still need to pay taxes on your Guernsey income (excluding bank deposit interest). You can use the standard charge to reduce the tax you owe on your Guernsey income. It's important to note that choosing the standard charge means you won't be able to receive any allowances, reliefs, or deductions.
• Guernsey residents in any of the three residence categories can choose to pay a 20% tax on earnings from Guernsey. They also have the option to limit their tax liability on earnings from outside Guernsey to a maximum of £150,000 per year or a maximum of £300,000 per year on worldwide earnings.
• New residents in Guernsey who purchase an "open market" property can benefit from a tax cap of £50,000 per year on income sourced from Guernsey for the year they arrive and the following three years, provided that the amount of Document Duty paid for the house purchase is at least £50,000.
  

Additional Benefits of the Guernsey Tax System

The following taxes are not applicable in Guernsey: 

• Capital Gains Tax
• Wealth Tax
• Inheritance, estate, or Gift Tax
• VAT or Sales Tax

Don't hesitate to contact us for more information about Guernsey Individual Tax and its benefits. We can help you determine your residency status and explore the tax advantages in Guernsey.