Should Guernsey raise its tax cap from £60,000 to be closer to Jersey and the Isle of Man?
That’s the question being asked by Innovate Guernsey – the body set up to help stimulate the island’s entrepreneurial economy.
Currently, when wealthy people move to Guernsey and buy a qualifying Open Market house they can opt to cap their tax at £60,000 on of all their international earnings, for four years.
Likewise, internationally-mobile people who spend between 91 and 182 nights on the island can opt to become Guernsey tax resident and set the cap at £50,000 on their non-Guernsey income.
But if they move to Jersey they’re taxed at a much less generous £250,000, with the Isle of Man charging £220,000 – although there’s no time limit in both cases.
With tax reform high on the political agenda, Innovate Guernsey has suggested raising Guernsey’s threshold to between £100,000 and £150,000 – with part of the money raised being ring-fenced for innovation.
An IG spokesperson said the “modest adjustment” would generate additional revenue but the island would still “remain competitive”, as it’d be lower than the other crown dependencies.
“If a defined portion… were ring‑fenced rather than absorbed into general spending, it could provide the durable funding stream that Guernsey’s innovation ambitions currently lack,” they added.
IG has proposed setting up a dedicated innovation fund that would focus things like:
- Co‑investment alongside private capital in investable Guernsey businesses
- Innovation skills, training and talent development
- Testbeds and pilot environments for new products and services
- Seed support that helps create the conditions for private‑sector investment
The spokesperson said Jersey already took into account whether wealthy people moving to the island had “experience in innovative or diversifying businesses, local philanthropy or investment”.
“Guernsey could turn its own tax cap into an ‘innovation contribution” model: still attractive, but linked to the island’s economy,” the added.
