Guernsey Rolls Out A New Red Carpet For HNW Individuals - Reactions
Legal and tax-focused practitioners examine budget proposals by the IFCs that are, in part, aimed at encouraging HNW individuals to come to the island.
Lawyers and accountants have reacted to moves by policymakers in Guernsey to attract high net worth investors through a new tax break.
The proposals, if accepted, will bring in a lower tax cap of £50,000 ($65,933) for three years for new residents, if they have paid a minimum of £50,000 in document duty - effectively those who have spent a little over £1.5 million on an Open Market property.
"This is an interesting proposal that, if approved, would fulfil the dual objectives of adding to Guernsey's offering for HNW residents and reinvigorating the market for high-end Open Market real estate,” Martyn Baudains, advocate, said last week. He leads the Guernsey property and relations team at Ogier.
"The motivation for moving to Guernsey has been less and less based around tax arguments over the last ten years, and more about the quality of life and availability of high-class property - the approach laid out in the [Guernsey] budget proposals does an effective job of keeping the Island's sales pitch as widely based as possible,” he said.
At Grant Thornton, the accountancy, it said of the measures: “And a surprise is a new tax incentive that is specifically aimed to stimulate the open house market in addition to attracting HNW newcomers to the island. The stimulus is a £50,000 tax cap for up to four years if on arrival in the island one has spent at least £50,000 in duty purchasing an open market house, if spent within 6 months before or after arrival. That’s equivalent to a house costing £1.5 million or more. This new incentive is not available to anyone resident in the island in the last three years.”
Elsewhere in the Guernsey budget, the island plans to raise some £432 million revenues in 2018 and “control” expenditure to £378 million thus allowing a further transfer to capital reserves, according to Grant Thornton. The budget aims to raise some additional £3.5 million of new taxes, it said. The income tax rate of 10 per cent is being extended, it said.