It is little wonder then, that some are considering a move to more tax friendly jurisdictions.
Where a decision to relocate is made solely for tax reasons, people often struggle with the change.
In our experience, reduction of tax may start the conversation but it is lifestyle which will decide whether a move takes place. That said, tax cannot be ignored. In this regard if you are moving from the UK the most important factor will be to ensure that you are no longer resident for tax purposes
Residence, by its nature is a very subjective area and it is difficult to apply objective principles. The tax profession has been pushing HMRC to introduce statutory rules in this area to provide more certainty and the intention is to introduce a statutory test with effect from April 2013.
In applying the test there will be three levels:
In other cases HMRC are looking to link the number of days that can be spent in the UK to the number of connections with the UK.
There are still a number of questions regarding the implementation of some aspects of the proposals, but in terms of increased certainty the signs are very encouraging.
With no capital gains tax, inheritance tax, or gift tax, low level levels of corporate tax (0%/10%/20%) and very beneficial tax rates for incoming high net worth individuals (20% on the first £625k and 1% on the balance), the Island’s tax system is very attractive.
The special regime for incoming high net worth individuals moving to Jersey has existed for some years and it is possible, circumstances permitting, to effectively cap liabilities at £125k per annum. Obtaining residency permission under this regime is simple and quick, whilst other jurisdictions highlight the fact they have no process, most people considering Jersey appreciate the fact that some checks are undertaken by the authorities.
If you want to discuss either of the above topics or require information on obtaining Jersey residency please contact Garry Bell.