BREACH OF CONDITIONS FOR IC STATUS/TEMPORARY BREACH

Where a Guernsey resident individual or company which id wholly owned by non-residents) acquires a beneficial interest in an IC or where any other condition is breached, IC status id lost for that year and thereafter. The consequence of this will be to charge the IC to tax at the standard rate as if IC status has not been granted

Where a condition for IC status is breached due to:

  • isolated transactions with Guernsey residents, or
  • a Guernsey resident acquiring a beneficial interest in an IC in circumstances beyond the control of the IC, or
  • an IC inadvertently failing to comply with a requirement to supply information to the Commission or the Income Tax Authority, the Administrator of Income Tax may exercise his discretion to allow corrective action by a specified date, in which case IC status will continue to apply.

CONSEQUENCE OF LOSS OF IC STATUS

If IC status is lost it cannot be regained.

INCOME TAX AUTHORITY MAY REVOKE IC STATUS

The Income Tax Authority may revoke IC status with effect from the beginning of the following year if it ceases to be satisfied:

  • with the activities of the IC, or
  • that the specified tax rate remains appropriate to it in the best economic interest of Guernsey.

RIGHT OF APPEAL AGAINST LOSS OF IC STATUS

An IC which disputes its loss of status has a right of appeal against a tax assessment raised as a consequence of this. It cannot , however, challenge the specified tax rate applicable to it.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

For further information contact Peter Crook on Tel: +44 (0) 1481 712706 or visit the Guernsey Financial Services Commission Web Site at:

http://gfsc.guernseyci.com