SIGNIFICANT DEVELOPMENTS
There have been no significant tax or regulatory developments in the last year.
TERRITORIALITY AND RESIDENCEIndividuals who are resident and ordinarily resident in Jersey are liable for tax on their worldwide income, while individuals who are resident but not ordinarily resident in Jersey are taxed only on Jersey-source income and overseas income that is remitted to Jersey. A person who is not resident in Jersey is liable for tax on Jersey sources of income, except bank-deposit interest, which by concession is exempt. Income from Jersey-exempt companies is not considered Jersey-source income. Generally, the following establish an individual’s residence for tax purposes.
1.Residence for a period of six months or more in total in any year.
2.Residence for more than three months per year on average over a period of four years.
3.Having accommodation available for that individual’s use and visits to the Island for any length of time.The concept of ordinarily resident is similar to that in the United Kingdom and is related, inter alia, to the place where the person is habitually resident.
GROSS INCOME
Employee gross income/While a resident of Jersey, an individual is assessable on the full amount of the emoluments of employment, no matter where the duties are performed. Benefits are generally not taxable unless they can be converted to money or money’s worth. Where a nonresident carries out any duties in Jersey, the emoluments attaching to these duties are assessable in Jersey.Capital gains and investment income/There is no assessment on capital gains unless they result from a venture in the nature of a trade, in which case they are liable to income tax at the rate of 20%.Residents are liable to tax at the rate of 20% on their worldwide investment
income, no matter where that income is paid. Nonresidents are liable to tax at 20% on their investment income arising in Jersey unless their only Jersey source of investment income is bank-deposit interest, which by concession is exempt.
Deductions
Business deductions/There are no significant deductions allowable to individuals not engaged in a trade. Travel to and from work is not regarded as a business expense, nor are moving, motor, or entertainment expenses unless they were incurred wholly and exclusively for the purpose of the employment, trade, or profession.Nonbusiness expenses/ Deductible expenses are shown below.
1.Interest paid to banks and similar financial institutions.
2.Premiums paid on a qualifying life insurance policy, subject to certain restrictions.
3.Pension contributions paid to approved schemes, subject to restrictions.
4.Annual payments.Personal allowance/ Nonresidents are not entitled to Jersey personal allowances.
However, proportional allowances are available to Commonwealth of EU citizens in receipt of Jersey-source income.
Allowances for 1999 include the following items.
￡
Earned-income allowance-One -quarter of earned income (maximum) (1) 3,400
Married allowance 5,200
Single allowance 2,600
Child allowance (for eachchild) 2,500
Wife’s earned-income allowance (maximum)(2) 4,500
Higher child allowance for children in full-time further education 5,000 Additional child allowance for widow (er) s, etc. 4,500
Exemptincome &nbs
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