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2018 Jersey Budget Update

11 March 2018

Jersey’s 2018 Budget is intended to support working families by increasing tax allowances and generate a greater contribution from businesses and High Value Residents. 

The most significant measures see large corporate retailers targeted, an updating of the High Value Residents regime and an increase in ISE fees across the board. 

The key highlights are:

Company Taxation

Large corporate retailers

Up until the end of 2017 all corporate retailers were subject to income tax at the rate of 0%. From 1 January 2018:

  • all corporate retailers whose taxable profits are less than £500,000 continue to be subject to tax at 0%;
  • large corporate retailers whose taxable profits are greater than £750,000 are subject to tax at 20%; and
  • a form of tapering relief is available for large corporate retailers whose taxable profits are between £500,000 and £750,000, so that their effective rate of tax will increase on a sliding scale from 0% to 20%.

A large corporate retailer is a company with a retail turnover of not less than £2 million and which derives 60% or more of its total trading turnover from retail business. When calculating if the £2 million turnover test is met, companies must include the retail turnover of all associated companies in the group. Broadly, companies will be associated if they are under the same control and their retail turnover is 60% or more of their total trading turnover.

Widening of definition of financial services companies 

Companies that are included within the definition of a financial services company are subject to income tax in Jersey at the rate of 10%. From 1 January 2018 the definition has been widened to include:

  • Companies registered under the Financial Services (Jersey) Law 1998 to carry out general insurance mediation business (classes P&Q only);
  • Companies holding permits (A or B) under the Insurance Business (Jersey) Law 1996;
  • Companies registered under the Financial Services (Jersey) Law 1998 to carry out fund services business as a registrar;
  • Companies holding a permit under the Collective Investment Funds (Jersey) Law 1988 by virtue of being a functionary who is a registrar; and
  • Finance companies – i.e. companies trading in the provision of credit facilities to customers by way of making any advance or granting of credit.

Finance companies include those supplying goods by hire purchase, leasing, conditional sale or credit sale, but do not include those providing intragroup financing, as connected companies are not customers under the new provisions.

Taxation of High Value Residents (HVRs)

Following last year’s review of the HVR regime changes to be implemented with effect from 1 January 2018 are as follows: 

Individuals who are granted HVR status after 1 January 2018 will be required to pay a minimum tax contribution of £145,000 instead of £125,000. They will therefore need to generate taxable income of at least £725,000.

A top-up mechanism has been introduced to ensure HVRs who generate insufficient income to meet the minimum contribution still pay the required amount of tax.

The level of expected annual minimum tax contribution is to be reviewed on a regular basis. The first review will be completed for 2023 and subsequent reviews will be every 5 years

Goods and Services Tax

The annual fees for International Services Entities (ISEs) which are placed outside the scope of Goods and Services Tax have increased as set out below. 


Former amount

Amount from 2018




Trust company business






Fund services business/Collective investment fund (CIF) permit holders/ Alternative investment fund services business (AIFSB)



Fund services business (managed entity)/ CIF permit holders (managed)/



Entity meeting general conditions



Administered entities of trust companies/ CIFs/AIFs



Other Changes 

  • A number of changes to the tax rules applying to pensions have been introduced including extending the circumstances in which fund transfers can take place, a targeted anti-avoidance rule to prevent individuals withdrawing all of their pension fund tax-free while non-resident and then subsequently returning to Jersey, and greater flexibility with small pension funds.
  • The income tax exemptions have increased by 2.5%, bringing the single exemption to £14,900, married/civil partnership to £23,950 and the second earner’s allowance to £5,850.
  • From 2018, a tax deduction cannot be claimed against rental income for the cost of property rates (i.e foncier, occupier and island-wide rates).
  • Limited liability partnerships established in foreign jurisdictions are now treated as transparent for Jersey tax purposes. This brings the legislation in line with established practice
  • A general anti-avoidance provision has been introduced within the Stamp Duty Law.

On-going Work

  • The taxes office is continuing its review of the personal tax system with a view to modernising it, particularly the area of married taxation where the man is taxed on both his own income and the income of his wife.
  • A public consultation on potential changes to future taxation of benefits in kind is to be launched.
  • The Tax Policy Unit will issue a technical issues paper on the future deductibility of interest in the context of business activity.

Next Steps

For more inforamtion please contact David Osborne, Head of Tax at Baker Tilly Channel Islands, on david.osborne@bakertillyci.co.je  or DL: +44 (0)1534 755 106

Disclaimer: Statements and opinions expressed in articles, reviews and other materials herein are those of the author(s).

While every care has been taken in the compilation of this information and every attempt made to present up-to-date and accurate information, we cannot guarantee that inaccuracies will not occur.

Baker Tilly Channel Islands Limited will not be held responsible for any claim, loss, damage or inconvenience caused as a result of any information within these pages or any inform


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