The Economic Development Minister has refuted the findings of an expert economic report that Jersey is seeing a decline in interest from high-value individuals looking to relocate to the island, at the same time as Guernsey’s scheme is booming.
In response to questioning from Express at a recent online media briefing, Senator Lyndon Farnham asserted that Jersey’s high-value residency scheme – designed to attract wealthy immigrants to move to the island – is “strong”, and that “there is high demand and a high level of interest” for high-net-worth residents looking to live in the island.
However, this is at odds with the finding of a recently published economic forecasting report compiled by senior Treasury officials and independent experts, focusing on which aspects of the public purse are going to worst hit by corona virus.
The Income Forecasting Group (IFG) projected that the Government could lose between £80million and £137million due to the virus crisis, with the economy struggling to get back on its feet for at least another two years.
Pictured: The expert report forecast where the public purse would be worst hit by the corona virus crisis (IFG).
The forecasters predict that both income tax and stamp duty are due to take a major hit and could, in part, be explained by fears that relocations in the high-value residency tax regime will reduce as a result of the pandemic.
Based on data received directly from Locate Jersey, the body which seeks and manages all high-net worth relocations, the IFG report had this to say regarding the scheme’s impact on income tax:
“Outturn data from Revenue Jersey indicate that the tax received from these taxpayers for 2018 was £1m lower than forecast, this lower tax is taken as a new baseline position and the reduction therefore recurs in each year of the forecast.
“Further, data have been received from Locate Jersey on HVR arrivals for 2019, and expectations for 2020 onward. The net impact of these is a further reduction to the forecast from 2020.”
Focusing in on stamp duty, the economic forecast predicted “continuing uncertainty” in this regard.
Whilst it states that “2020 has seen a strong start in the transactions over £2m made by high value residents,” the report continues by saying that “discussions with the Director of High Value Residency, and the reduced economic assumptions of the housing market this year, lead to continuing uncertainty in this component of the forecast.”
When asked by Express at this week’s media briefing focussing on the Government’s plan for economic recovery, Senator Farnham gave a different view.
Video: Watch the online media briefing in full (Facebook/Government of Jersey).
The Minister said: “Our high net-worth programme is strong there is a high demand and a high-level of interest for the high net-worth community who want to relocate to Jersey. But we are continuing to operate our policy of being very careful and very selective of who comes to live here, and we continue to follow that policy with high demand.”
Responding to a further question from Express about the apparent discrepancy between his stance and the IFG report, Senator Farnham continued: “Well, this is a fast moving a situation we’re in and views will change as we go from week to week, but I can reassure you that confidence is high in Locate Jersey and amongst the Ministerial team that the demand will remain strong. We might see a dip in the short-term but we're going to still continue to promote and see significant returns from that sector of our economy."
He added: “I think it's also worth saying that, right now, many of our high net worth individuals who have remained anonymous have contribute[d] significant amounts money to the covid-19 to various schemes and to the community.”
Meanwhile, Guernsey claims its high-value residency scheme appears to be on the opposite trajectory after the way the States of Guernsey have handled the pandemic has gained national and international acclaim.
Pictured: Locate Guernsey reports that they've got requests pouring in for relocations.
In a recent media statement, Director of Locate Guernsey, Jo Stoddart, commented: “Conversations I’m having reflect the exemplary way that Guernsey has handled the pandemic. We expected enquiries to slow down after a record 2019 but numbers have held up as individuals and businesses have seen the way the island has responded to covid-19 and are champing at the bit to relocate here partly as a result of that. Enquiries are coming in from all over the world, from South Africa, to Singapore, to Canada. It shows we’ve genuinely made a name for ourselves because of how we’ve responded to this crisis.
“People relocating to Guernsey have always been attracted to its safety, stability, security and fantastic quality of life. However, the Island’s response to this global pandemic has really cemented that in people’s minds.”
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