HN20 - Introduction of “Standard Charge” Income Tax in Guernsey

With effect from the Year of Charge 2009 (calendar year 2009), an individual who is resident but not solely or principally resident in Guernsey may elect to pay a set amount of tax known as the “standard charge”. This basis of assessment applies to individuals who spend between 91 and 181 days in Guernsey in a calendar year.

• For the Year of Charge 2009 the standard charge is £25,000. This amount may be subject to change for future years.

Up until the Year of Charge 2009, the liability to Guernsey income tax of an individual who was resident but not solely or principally resident in Guernsey was based on the income which arose or accrued from sources in Guernsey, together with any income which arose from sources outside of Guernsey which was brought into or received in Guernsey in the relevant year.

From January 1st 2010 an individual who does not elect to pay the standard charge will be liable to tax on the basis of their total worldwide income. Relief for the appropriate personal and other allowances will still be given on the same basis as at present, as will relief in respect of income tax paid in other territories.

Transitional provisions however provide that, for 2009 only, an individual who has not elected for the standard charge will be taxed on the basis which existed prior to 2009, as detailed in the paragraph above relating to prior to 2009.

The liability of an individual who is non resident for Guernsey income tax purposes remains
unchanged.

(For income tax purposes Guernsey and Alderney are treated as if they were one)

If you require additional information on this topic please contact John Nelson at the Dixcart office in Guernsey: john.nelson@dixcart.co.gg