Sark’s longstanding tax relief system is being updated – with a temporary limit on the number of people who can benefit from paying the minimum amount being brought in within months.
From January only one person per household will be able to use the ‘Box 2’ tax relief policy.
Box 2
The Box 2 system allows a person living in the same household as a forfait (main tax) payer to pay the minimum personal capital tax, regardless of their own income, assets or wider financial circumstances.
Until now, there has been no limit on the number of people in one household able to claim the Box 2 relief.
Chief Pleas has now agreed to retain Box 2 but prevent a single forfait payment from supporting multiple minimum-tax elections.
The change is for one year only initially, while the future of Box 2 is considered as part of a wider raft of tax reforms planned for Sark in 2028.
Conseiller Carol Cragoe, Member of the Policy & Finance Committee, said the system needs to change because more people are calling for tax reform in the island.
“The proposal to restrict Box 2 is a limited and targeted change for the 2027 tax year,” she explained.
“It responds to the need for fairness and revenue protection while respecting the consultation feedback that wider tax reform should be developed more carefully for 2028.
“It keeps Box 2 in place, preserves a simple option for one eligible member of a forfait-paying household, and introduces a proportionate safeguard against multiple minimum personal capital tax elections arising from the same forfait-paying household.”
